New regional airline proposed (Brunei)

[zeqa 1]

http://www.bt.com.bn/frontpage-news-national/2013/11/19/new-regional-airline-proposed

 

 

 

 

THE Ministry of Communications is seeking public feedback on a proposed regional airline which will be registered in Brunei, and will complement the national carrier as a feeder airline.

 

A consultation paper, which will be accessible from today via the ministry’s website (www.mincom.gov.bn), will discuss the rationale behind the policy proposal.

The ministry is seeking comments from the public and other stakeholders on aspects such as the best business models for Brunei’s aviation industry and whether there is enough demand and supply in the region to sustain the operations of the proposed airlines.

 

“This consultation paper is intended to gather feedback for the Ministry of Communications to further consolidate policy support for the proposal to allow the setting up of a new registered regional airline service in the country,” the ministry said in a statement yesterday.

“The approval will also depend on the modality that this new airline service will become a business partner and a feeder airline to Royal Brunei, that will complement services for both parties in the region,” it added.

 

Director of Transportation Dr Hj Supry Ladi, who has also been tasked to lead the ministry’s new Research and Development Division, told The Brunei Times the policy proposal also considers interests from parties who have expressed their intent to set up a regional airline registered here.

He added he will be carrying out seminars or dialogues with stakeholders over the coming months to gather public feedback and opinions for the formulation of the policy proposal.

“This paper is also intended to gather community consensus and to enable the Ministry of Communications to identify options which are in the best interests of the nation,” the ministry’s press release said.

 

Feedback on the paper will be compiled until December 19, 2013, it added. These views can be submitted to the ministry via email – supry.ladi@mincom.gov.bn or zuraidah.hussain@mincom.gov.bn – or via fax at 2380884. The feedback is also hoped to “encourage aviation services in Brunei to become more competitive, dynamic, controlled and compliant to international standards and to further consolidate aviation connectivity regionally to encourage further economic growth through tourism and trade”.

The Brunei Times

 

[JuliusWong 0]

RB could barely make it already, yet they are still toying around with in their lofty dream to set up another airline....?? I think some people needs serious brain check. It doesn't take a rocket science to know a population of 400,000 does not have the economies of scale to sustain two airlines.....

[Mushrif A 3]

The regional airline to only operate during school holidays....that's when there is a small increase in demand...otherwise, forget it.

[Teo 0]

if the regional airline is like Silk Air flying to smaller cities or should i say more exotics destinations.it might work.

err Brunei-Bali? Brunei-Langkawi, Brunei-Penang? maybe

[zeqa 1]

In the 90s I recall RBA operates BWN- Miri, BWN - Labuan, BWN- Bintulu & BWN- Pontianak. They use the small Fokker 100 jet engine plane. I think they are trying to revive that?

[Mushrif A 3]

if the regional airline is like Silk Air flying to smaller cities or should i say more exotics destinations.it might work.

err Brunei-Bali? Brunei-Langkawi, Brunei-Penang? maybe

 

You may want to first verify the population in Brunei. And a large number of the working population are working in the civil service and tend to only travel during school holidays and primarily to destinations where they can shop.

 

In the 90s I recall RBA operates BWN- Miri, BWN - Labuan, BWN- Bintulu & BWN- Pontianak. They use the small Fokker 100 jet engine plane. I think they are trying to revive that?

 

They had the F50 to do the MYY and LBU runs. Also, there was the Merpati Intan venture which lost a Do228 on approach to MYY.

[zeqa 1]

Yeah i recall that incident. Was that plane wearing RBA colours?

 

http://www.bt.com.bn/2013/11/20/gov%E2%80%99t-considers-allowing-new-regional-airlines

Gov’t considers allowing new regional airlines

 

AL-HAADI ABU BAKARBANDAR SERI BEGAWANWednesday, November 20, 2013THE government is studying to introduce policies that seek to allow the establishment of new regional airlines including low-cost carriers (LCCs) in Brunei that could service BIMP-EAGA (Brunei Indonesia Indonesia Philippines - East ASEAN Growth Area) routes in the near future.In a consultation paper on the proposed policy for the establishment of regional aviation service in Brunei, the Ministry of Communications (Mincomm) proposed its plans to allow the establishment of a new airline to service regional routes in response to “positive interest” from local and international companies.“This interest is welcomed and reflects the development of the civil aviation industry that requires a holistic approach and analysis,” the ministry said in the consultation paper.The ministry said it is currently in the process of reviewing its policy on the establishment of a regional airline service registered in Brunei as well as existing services by flag carrier Royal Brunei Airlines (RB).According to the ministry, the approval will depend on the modality that the new airline service will become a business partner and a feeder airline to RB and will complement services for both parties in the region.The new airline will be required to service routes in the BIMP-EAGA region and any route not covered by RB in its current and future plans.The ministry acknowledged some of the low-cost airlines which have grown rapidly in the South Asian region, which include AirAsia, Tiger Airways, Cebu Pacific Air, Nok Air, Lion Air and Adam Air, among others.The consultation paper, which was released yesterday via the ministry’s website, is intended to gather feedback for the ministry to further consolidate policy support for the proposal to allow the setting up of a new registered regional airline service in Brunei.Feedback on the paper will be compiled until December 19, 2013, and the ministry is expected to finalise the new policy early next year.Earlier this year, Brunei-based cooperative Koperasi Bumiputra Bersatu Bhd (KBBB) signed a memorandum of understanding with the Brunei Darussalam BIMP-EAGA Business Council for the proposal to develop a Brunei-based low-cost carrier Darussalam Air.The project, estimated to having an initial investment of RM6.4 billion, is set to begin operations in the first quarter of next year, according to a report by Bernama.The airline is said to primarily offer affordable flights using Airbus A380 planes for prospective Haj and Umrah pilgrims from eastern Indonesia, southern Philippines and parts of China and Indo-China, using Brunei as a stop-over.

[Mushrif A 3]

Would Darussalam Air offer flights to the moon too? Sounds like crappy journalism there or somebody's wet dreams.

[KK Lee 5]

Believe CRJ/ERJ may work for BWN.

[flee 5]

In the 90s I recall RBA operates BWN- Miri, BWN - Labuan, BWN- Bintulu & BWN- Pontianak. They use the small Fokker 100 jet engine plane. I think they are trying to revive that?

If Brunei copies the SQ model, then any new regional airline would be operated by RBI (probably as a subsidiary).

 

If Brunei copies the Malaysian way of doing business, cronies will be the ones who will start the new regional airline.

[Waiping 12]

Would Darussalam Air offer flights to the moon too? Sounds like crappy journalism there or somebody's wet dreams.

 

They could use a simpler name such as FlyBrunei or something like that. Easier to remember.

 

Believe CRJ/ERJ may work for BWN.

 

There was a report on RBA considering A320s/B737s. Might be easier on them if they stick with similar aircraft.

[Johan Z 0]

I like FlyBrunei. Not sure about Darussalam Air. It's too mouthful.

[zeqa 1]

Would Darussalam Air offer flights to the moon too? Sounds like crappy journalism there or somebody's wet dreams.

 

Yes- They plan to get the A380 too.

 

If Brunei copies the SQ model, then any new regional airline would be operated by RBI (probably as a subsidiary).

 

If Brunei copies the Malaysian way of doing business, cronies will be the ones who will start the new regional airline.

 

Its the same in Brunei.

 

I like FlyBrunei. Not sure about Darussalam Air. It's too mouthful.

 

All of Brunei assets like RBA, tel Bru, BIA etc etc are under Darussalam assets,

[haza 0]

If Brunei copies the SQ model, then any new regional airline would be operated by RBI (probably as a subsidiary).

 

If Brunei copies the Malaysian way of doing business, cronies will be the ones who will start the new regional airline.

 

Reserve your words until PR win 14GE.

 

Then you can see not only cronies, all their families enjoyed it as well like what happen in their three main parties – Ketua Umum, Spiritual leader and Advisor not democratically elected but have full power + their wife, son, daughter, son in low, daughter in law and you name the rest, hold a very good position.

 

Edited November 21, 2013 by haza

[zeqa 1]

http://www.bt.com.bn/letters-editor/2013/11/23/rb-strategies-filled-conflicting-business-logic

 

 

Dear Editor,

RESPECTFULLY, I refer to your report: “New aircraft mulled for India, Japan, China routes, Flag carrier mulls mid haul flights” (The Brunei Times, Nov 7, 2013).

Briefly, when I was abroad last week, I almost completed studying this book: “Shaking the Skies” by Giovani Bisignari (2013), former Director General and CEO of IATA.

 

I also studied these reports:

- In Fortune Nov 18, 2013:

“Can a state-owned comp any take on Boeing and Airbus? Comac, China’s aircraft maker, has exceedingly lofty ambitions”, by Scott Cendrowski;

- In New Strait Times, Nov 8, 2013

“Taking Air Asia to new heights - Its net profit tumble by 61.9 per cent, from RM153.13m (2012) TO RM58.35m (June 2013) despite a 5.48 per cent sales growth. - More references are listed below.

The weather vane statement, among others, made by RB’s Chief Commercial and Planning Officer was this: “More aircraft also has the potential to further improve productivity as economies of scale benefits will accrue to RB”.

 

He also justified the planned replacement of the current A380/A319 with more technologically advanced aircraft for the targeted “people travelling between India and Brunei for business and leisure, those visiting friends and relatives, and those who will be travelling on RB network to other cities. At the moment travellers from southern India fly to Brunei via Singapore.” (probably also on SIA flights).

The above strategies are loaded with self-conflicting basic business/economic logic: How could RB automatically enjoy economies of scale when “more aircraft” (how many aeroplanes? Which one?) when as a whole RB has already incurred fixed costs on the recently acquired fleet of Boeing 787 Dreamliners with their new variable operating and technical costs? When according to CEO South-Western Airline (USA) the customer volume is unpredictable and the air fares are very price sensitive.

 

Even Air Asia, the best budget airline has now been experiencing cost and volume pressures due to wrenching competition.

How could he be so dead certain, in justifying the acquisition of “more aircraft”, that RB could successfully wrest away from these SIA and other Indian airlines passengers that fly to and from Singapore and India, when we fully know that Singapore and Singapore Airport are jointly a shopping paradise and that Singapore City State constantly and increasingly offers more business/social attractions? These factors are the non-price attractions to those passengers which Brunei cannot emulate. Please be realistic. It is easy to buy aeroplanes. But how to pay for their fixed and variable costs? It sounds like RB is going to be a travel agent to India than specialising on attracting its passengers by offering affordable fares and non-price advantages, such as efficient and friendly services.

Note the catch: He said the acquisition of additional aircraft (how many units?) “would require additional pilots, engineers, ground operations staff and cabin crew.” Did he forget more new stocks of spare parts and other related costs? Who and from where would those additional pilots, engineers, cabin crew, etc, come from? What are the required languages. Bruneians do not speak Indian languages. Do not forget that RB must give more employment opportunities to Bruneians. My observations confirmed that they are easily the victims of being conveniently sidelined, even removed!

 

Recently RB curtailed flights from Australia, New Zealand to Middle East and UK. Now this very ambitious plan in a wrenching competitive market.

If one is to go to basic business economics in a very competitive market, economies of scale means that RB must have a lower relative assets base with higher volume of customer attracted by affordable rates and non-price value, for example, good efficient services and socio-cultural attractions or benefits. Religious necessity such as Umrah and Haj. But ponder on the self-defeating pricing policy of RB, exploitation by price discrimination: higher prices for Bruneian passengers, lower prices for those who buy RB tickets outside Brunei.

 

The pie is big, but how will RB get that slice which produces the required economies of scale if its total costs are further increased by acquisition of “more aircraft” relative to the very competitive market?

Experiences with RB after those series of endless changes in its top management with conflicting business strategies have built up a trove of golden information from the business aspect of “A Complaint Is A Gift - Recovering Customer Loyalty When Things Go Wrong” by Janette Barlow and Clause Muller to “Due Diligence” by Denzil Rankine, Graham Stedman and Mark Boner.

And please learn this professional advice from Giovanni Bisignari that “the future of the air travel industry lies in the LCC (low-cost carrier) business model”.

To conclude, RB is a national commercial/economic interest. Do not allow anymore upheavals by those who come and go.

It was a big hype that RB was leasing six 767. Now RB has just acquired five 787 Dreamliners, after having curtailed its established routes from several cities. Now, suddenly this weather vane idea to have “more aircraft” for India, Japan and China.

 

Where is that assumed economies of scale when RB is now going to acquire more planes incurring more costs? Expecting an increase in revenue? Net profit?

According to Mark Ingebretsen in his book “Why Companies Fail” (2003): (Airlines) unable to demonstrate a record of ever-growing earnings often pursue a path of ever-growing revenues instead. In lieu of actual revenues, they may also adopt strategies to boost market share hoping to lift the bottom line. Thus, the seeds of their own destruction are germinated within their business plan. Like armies that advance beyond their capacity to supply themselves, they pursue a growth strategy (by “attacking” the markets of other airlines and their countries.) that inevitably leads to saturation and failure.”

Other useful references are:

 

i. “Simply Flying” by Nawal K. Taneja (2004);

ii. “Attention All Passengers ~ The Airlines’ Dangerous Descent - And How To Reclaim Our Skies” by William J. McGee (20012);

iii. “Flying High in a Competitive Industry - Secrets of the World’s Leading Airline (SIA)” by Loizos Heracleous, Jochen Wirtz and Nitin Pangkan (2009);

iv. “Like A Virgin - Secrets They Won’t Teach You at Business School- by Richard Branson (2012);

v. “Michael O’ Leary ~ A Life in Full Flight by Alan Raddock (2007); Jayne Ng (2008).

Pehin Orang Kaya Lela Raja Dato Seri Laila Jasa Haji Awang Abdul Rahman bin Haji Abdul Karim c/o Abdul Razak Holdings

The Centrepoint, Abdul Razak Complex, Gadong

[Mushrif A 3]

The writer of that letter who is a prominent Bruneian sounds like your typical armchair CEO....

[zeqa 1]

The writer of that letter who is a prominent Bruneian sounds like your typical armchair CEO....

 

hahaha.. Yeah I guess he likes doing research ( thesis type)