September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
21 November 2022, Hilton London Metropole
ABTN talks to Royal Brunei Airlines’ deputy chairman Dermot Mannion about the airline’s strategy and plans following the cutting of several long-haul routes
Since you came onboard, Royal Brunei has cut many long-haul routes such as Auckland, Brisbane and Perth. What is the strategy of the airline?
I’ve been associated with the airline for 18 months and during this time we’ve had to restructure, cutting back on our long-haul activity. We’ve cut a whole bunch of routes to Australia because the airline was in an impossible position. We’re a smaller carrier but found ourselves competing for Kangaroo traffic against big airlines in the Middle East. I was with Emirates for years, so I know only too well how they operate, and there are some market places you’re better off out of.
On long-haul we refocused attention to look exclusively at the strategically important routes for Brunei: Melbourne in one direction, and London and Dubai in the other. We’ve been investing a lot in training, in product development for the organisation and I think we’re beginning to see the benefit of that now.
We won the award ‘Airline of the Year’ for the province of Sabah in 2011, which is a good award for us as we’re up against stiff competition, Japan Airlines, Singapore Airlines, Malaysian Airlines, there are multiple carriers there.
So that was a good positive development for the organisation and I suppose the next change will be August next year when we become the first airline in south-east Asia to introduce the Dreamliner. So, by June 2014, we’ll have five 787s and we need them. They are the optimum aircraft for us in terms of size. We’ll have 254 seats rather than the B777 aircraft which are a bit larger at 285 seats, and the configuration from the passenger point of view is going to be very strong, 3-3-3 in economy and 2-2-2 in business. There will be 18 business class seats, with 79 inches of pitch, which is very good by industry standards. In economy, the seat pitch is going to be 33-34 inches.
So if you do not want Brunei to be a hub, what’s the aim?
We are adopting an approach that’s much more centred on traffic potential into and out of Britain and to Brunei. Brunei is a small market and country, with a population of only 400,000 and it’s relatively unexplored from a tourism point of view. It’s a perfect stopover if you are going somewhere else in the region, and something of an undiscovered treasure, we think. It’s one of the few places in the world where you can be in the heart of the rainforest within 20 minutes of the airport.
Where else in the region would someone go?
We’ve got 14 flights a week to Kota Kinabalu, for instance, an impressive destination by itself. It’s the fastest growing airport destination in south-east Asia with a very attractive coastal resort.
How do you balance long-haul and short-haul?
You need a certain critical mass if you’re going to be relevant in the long-haul business so you’ve got to be daily which is what we have on Melbourne and London which also stops at Dubai. We feed traffic from Brunei, from other regions and we feed from Melbourne.
In the old days we had a more extensive network to Australia. But from a standing start ten years ago, the Gulf carriers have probably got 40 per cent of that market now. Emirates alone are close to 30 per cent of that, Etihad are now beginning to expand. That market place is going to become ever more competitive, so its really not the place for us.
What is Brunei’s airport like?
There is a modernisation strategy going on now, which is upgrading the interiors of the airport, and will be ready probably by the end of 2013 - good timing for us as it coincides with 787s entry into service. We’re also doing a whole rebranding exercise; we have consultants working with us, and by the end of the year you’ll begin to see some manifestation of that. It’s all working together, rebranding the airline, repackaging the airport, and refleeting at the same time. The idea is that by early 2014, the whole rebranding scheme is completed and in operation.
With the increased fuel costs, how is this affecting your passengers, are you able to keep prices the same?
We have to increase fuel surcharges like everybody else. The fuel shortage is a good news, bad news story for Brunei; good for the local economy as Brunei is a substantial producer of oil and gas.
As far as the corporate market is concerned, what industries are located in Brunei and who flies with you?
Some 30 per cent of our traffic to and from the UK is business-orientated. We get business from SMEs who are not on corporate accounts and who are looking for something that is price competitive. Also we find people using Royal Brunei Airlines as a gateway not just to the south-east Asia region, but occasionally to Melbourne as well.
More generally Brunei has got a diversification strategy under way, to move away from an over dependence on oil and gas. They’re trying to encourage the high technology sector and we’re beginning to see some positive development in that. There’s a huge investment going on in education in Brunei. At any one time, there’s at least 3,000 students sent overseas by the government of Brunei, most of them to the UK, to be educated at the government’s expense, to the top business schools, science colleges and so on are also flying with us. Tourism is also important. Right now, the government sees that it is part of a diversification strategy and is absolutely crucial.
For London, though, there is the stop in Dubai before getting to Brunei.
In the period before I arrived at RBA, the airline had an order for long-range B777s, which would have gone all the way from Brunei to London non-stop, but to be frank, the economics of that just didn’t work out. Dubai traffic is very important to us, as is London, so keeping the two-stop approach on balance is the one that works best for us. But that sometimes means we need to adjust that in terms of pricing, if we’re looking to attract the business traffic to go from London all the way to Melbourne. It’s a very short stop, anyway. Some of our passengers are complaining the stopover isn’t long enough, because they don’t get to go to duty free. The stop over is 45 minutes, so if you’re trying to run through Dubai airport, that’s a real challenge, even for the ardent shopper.
Do you get much MICE business flying with you?
There’s a very good convention centre in Brunei, the excellent five-star Empire Hotel and Country club that is capable of hosting large events. From December 14-16 this year, Brunei is hosting the Royal Trophy for Golf, which is going to be played between Europe and Asia. The next series of matches is going to be in Brunei at the Empire, and it’s going to be a great opportunity for Brunei to showcase itself as a potential destination for MICE events.
Additional research by Samantha Tucker