Royal Brunei's Possible Foreign Equity Partner

[Teo 0]

from Irish Independent

Royal Brunei Airlines may seek out an equity partner next year, according to the deputy chairman of the Far East carrier, Dermot Mannion.

Speaking to the Irish Independent, Mr Mannion said that the past two years had been spent right-sizing Royal Brunei in the face of steep competition in south-east Asia. The number of staff at the airline has been reduced from 2,000 to 1,500, while about $100m (€73m) has been cut from its cost base.

 

Royal Brunei will take delivery of another two Dreamliners between January and February, and by April next year aims to be the first airliner to use an all-787 aircraft-fleet on its long-haul network.

 

Mr Mannion said a decision about an order for about 10 short-haul aircraft would be made by the end of the year. He said he'd be holding meetings with both Boeing and Airbus officials in the next two weeks to finalise an order.

Asked if he'd be open to developing close ties with a larger carrier via either a partnership or another airline taking a stake in Royal Brunei, Mr Mannion said he would explore such opportunities next year.

"We will be looking at a joint venture opportunity and a cross-equity shareholding," he said. "We'll look at that in 2014. It will be the next phase of development."

He said such options would suit Royal Brunei "strategically".

He added that Royal Brunei was "open to having dialogue" with other "like-minded" airlines.

from Arabian Business

Mannion says it is also looking to refresh its short-haul fleet from six into “double figures”. It is looking at the Boeing 737-MAX jet and Airbus A320neo, with a decision expected by the end of the year and delivery, hopefully, around 2015.

Mannion says it has not ruled out re-establishing routes back to Australian cities after axing flights to Brisbane and Perth, along with its flight to Auckland in New Zealand. However, if re-introduced it will use the next-generation, single-aisle aircraft, which is better for range and fuel economics.

He confirms it is also looking at extra route opportunities to China and southern India, in addition to the 10 Asian cities it services such as Jakarta, Singapore, Hong Kong and Shanghai.

“So, in terms of the next four or five years our focus is much more on developing regional expansion,” he says.

Mannion says Royal Brunei has not ruled out a strategic partnership with a single airline, “which may well be in our best interests”.

What form and with which airline is “a subject for another day”. But, he isn’t interested in joining any existing alliances, which in his experience does not favour smaller airlines.

[Cire 0]

Let's hope Manning will continues to have less interference from the crony to execute his plans.

 

Brunei should also look internally to attract tourist or investors into the country. Otherwise, besides being just a home base, RBA will have to depend on its own citizens as its main passengers for its plane to get airborne. Its location is not strategically located for an enroute stop over flight, hence it will be tough for RBA to build its business.

[Teo 0]

http://bt.com.bn/letters-editor/2013/12/24/rb-must-be-wary-over-indulging-building-mountains-fixed-capital-costs

A Letter to Editor