Brunei Darussalam is a sovereign state located on the north coast of the island of Borneo, in Southeast Asia. This small nation-state has one international airport - Brunei International Airport that is served by a number of airlines including Singapore Airlines, Malaysia Airlines as well as Royal Brunei Airlines, which is the flag carrier of Brunei Darussalam. The other airport is Anduki Airfield, which provides helicopter flights to near-by destinations. The Department of Civil Aviation is the main regulatory body responsible for any civil air transport operations in this state. This body was set up to bring uniformity and regularity in the developments of the civil aviation sector of Brunei Darussalam.
Airports in Brunei Darussalam
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Royal Brunei Airlines leaps forward with 787. Early A320neo or 737MAX slots to provide another boost
Royal Brunei Airlines (RBA) will make a big leap in improving efficiency and profitability on 1-Dec-2013 as the carrier introduces Boeing 787-8s on the Bandar Seri Begawan-Dubai-London Heathrow route. Another leap could occur in 2016 or 2017 as the carrier, somewhat surprisingly given its very small size, has received aggressive proposals and early delivery slots for new-generation narrowbody aircraft.
RBA became in Oct-2013 the first 787 operator in Southeast Asia. It has already taken delivery of two 787-8s, one of which is in static display this week at the 2013 Dubai AirShow. RBA will be the first carrier to operate the 787 between Dubai and London, one of the world’s largest routes, and in Mar-2014 will become the first carrier to have an all-787 long-haul operation.
RBA meanwhile is in the closing phases of a competition between Airbus and Boeing for its new-generation narrowbody requirement, which includes over 10 aircraft for delivery from end of 2015. Airbus and Boeing are offering early delivery slots for their A320neo and 737 MAX families, with support from leasing companies, and the campaign has become very competitive as Boeing is eager to switch RBA’s narrowbody fleet from Airbus. RBA has already ruled out Embraer and Bombardier, after earlier considering large regional jets.
Southeast Asia airline market sees more rapid growth & high international low-cost penetration rates
Southeast Asia continues to post some of the highest growth rates in the global aviation industry, driven primarily by expansion in the region’s booming low-cost sector.
LCCs now account for over 50% of capacity in Southeast Asia’s four largest domestic markets – Indonesia, Malaysia, the Philippines and Thailand. Even more impressively, LCCs have been able to rapidly claim about a 50% share in the intra-Southeast Asia international market.
But there has also been growth in 2013 at nearly all of the region’s flag carriers. A large portion of this growth has been on regional routes as full-service operators have been able to join the LCCs in taking advantage of the generally favourable economic conditions in Southeast Asia.
Royal Brunei Airlines (RBA) is eager to move on to the last phase of its new business plan as it becomes the first airline in Southeast Asia to operate 787s. An initial fleet of four 787s, which will be placed into service in 4Q2013 and 1Q2014, will significantly improve efficiency and should lead to a further reduction in losses of RBA’s long-haul network.
One of Southeast Asia’s smallest flag carriers has come a long way since restructuring in 2011, when three medium/long-haul and two short-haul routes were cut. So far the results have been positive with RBA’s short-haul operation having already turned the corner and is now growing again in response to surging demand for travel within Asia.
RBA is now looking at also renewing its narrowbody fleet, which would result in further cost savings. But the carrier still has an uphill battle in reaching profitability given its small size and the prospect of increased competition with LCCs.
The lure for an airline to grow beyond its home market by targeting sixth freedom traffic is as old as the jet age: bygone Icelandic carrier Loftleidir ruffled feathers in the 1950s by carrying far more passengers than its local population while KLM in 1957 listed on the New York Stock Exchange, partially to quell nationalist fears it was taking too many passengers from the US.
Efforts to focus on sixth freedom traffic come and go: KLM has remained (upwards of 80% of its passengers transit its Schiphol hub) while Emirates has sprung up (now as the third largest carrier in the world). And, as Chinese and other north Asian airlines expand their roles, now carriers like Aeroflot are making new pushes into sixth freedom traffic.
Aeroflot's Moscow hub has strikingly similar geography to Helsinki, where Finnair is betting its future on sixth freedom traffic, while claiming a network that can rival those in Europe and the Middle East.
Royal Brunei Airlines (RBA) aims to significantly improve its long-haul product next year following the introduction of its Boeing 787 fleet as part of a new strategy to focus on brand in the long-haul market and price in the short-haul market, where it faces increasing competition from LCCs. The long-haul product enhancements will include 18 lie-flat business class seats on the 787s, which will be placed by early 2014 on the carrier’s London, Dubai and Melbourne routes as well as potentially to Hong Kong and Shanghai.
RBA is now slated to receive its first of five 787s in Aug-2013, as CAPA first reported in Nov-2011. The carrier will be the first in Southeast Asia to receive the 787. RBA deputy chairman Dermot Mannion said on the sidelines of the CAPA Airlines in Transition CEO Summit last week that the carrier plans to place into service three 787s by the end of 2013 with the final two being delivered in 1Q2014.
Royal Brunei Airlines (RBA) this month is increasing capacity to Melbourne and adjusting the schedule there in a bid to generate scale and improved financial performance. The government-owned carrier is settling into its restructured route network that in mid-2011 saw many loss-making long-haul routes eliminated, which RBA deputy chairman Dermot Mannion says is helping create financial stability as costs decrease and cash flow improves. The carrier will continue to monitor its regional network but is unlikely to open new destinations, preferring instead to add capacity when opportunities arise.
The restructure left RBA with significant excess capacity on its widebody Boeing 777 fleet but RBA later this year will return two of its six leased 777s and retain the rest until 787s arrive in late 2013. RBA expects the aircraft, combined with a new interior and redevelopments at Bandar Seri Begawan Brunei International Airport, will give the carrier a boost after high fuel prices and increased competition made it undertake the restructure and staff retrenchment.