Brunei Darussalam focused on flight

The aviation industry in Brunei Darussalam is looking to expand its contribution to the economy, with a new code-sharing agreement and ongoing investment in flight training facilities expected to increase passenger figures and stimulate employment.

In mid-February Royal Brunei Airlines (RBA) finalised a code-sharing agreement with Turkish Airlines (THY) that is expected to increase passenger demand for flights into the Sultanate.

Network reach

Under the agreement, which came into force on February 22, passengers of the two airlines will be able to make connecting flights between Bandar Seri Begawan and Istanbul via the Middle East hub of Dubai.

The agreement greatly extends the reach of RBA, which operates 10 aircraft on 16 routes, as its new code-sharing partner has undergone its own rapid expansion in recent years: THY now serves 284 destinations with some 300 passenger and cargo aircraft.

For RBA, the THY deal presents an avenue for growth beyond Asia. While the carrier already has a number of codeshare agreements in place, all are with regionally based airlines.

Restructuring to yield dividends

RBA has undergone restructuring in recent years, which saw the carrier cut loss-making routes and add more profitable ones, such as a short-haul flight to Bali. The carrier has trimmed nearly 16% of its destinations since the restructuring process began in 2011.

The airline also replaced some of its larger aircraft with smaller planes that are better suited to the routes on RBA’s regional roster, which has helped to lower operating costs.

At the same time, passenger numbers have risen, as RBA has sought to position itself as a full-service carrier in the South-east Asian market that is increasingly occupied by budget airlines. Passenger load factors now stand above 70% and are continuing to climb, according to airline officials.

As part of this restructuring, RBA is moving ahead with plans to modernise and expand its fleet. France’s Airbus is set to deliver up to 10 A320neo aircraft beginning next year, with a Boeing B787-8 Dreamliner also on order.

Tourist arrivals rose in 2015 – inbound traffic was up 8.6% year-on-year at 218,000 arrivals, according to data from the Ministry of Primary Resources and Tourism – with the majority of visitors coming from markets served either directly or via code-shares by RBA.

An upgraded fleet and increased passenger figures could allow the carrier to push towards profitability in the coming years. According to RBA’s latest five-year development plan, the carrier aims to break even or achieve profitability by 2021.

Training centre attracts regional clientele

Another aviation industry initiative, with a focus on training, is also gaining pace in the Sultanate.

Brunei Darussalam’s Multi-Purpose Training Centre (MPTC), with its increasing array of flight simulators, provides training for both rotary and fixed-wing aircraft, as well as courses in disaster response and emergency management.

The centre, a 60:40 joint venture between Montreal-based simulation and training provider CAE and Brunei Darussalam’s Ministry of Finance, represents a significant non-energy investment, valued at just over $100m.

The MPTC’s top flight simulator is for the Silorsky S-92 medium twin-engine helicopter. The S-92 is one of the helicopter models favoured by the oil and gas industry, including Royal Brunei Shell, with around 100 of the aircraft in service in the region. The centre is also gaining a steady stream of new clients from outside the country, with S-92 operators from Australia, China, Thailand and South Korea signing up trainees.

By October the centre plans to install a new simulator for the S-70i Black Hawk helicopter, which is widely used by security forces in the region, including Brunei Darussalam.

Diversification prospects

The MPTC has strong potential to contribute to the Sultanate’s economy and stimulate employment creation, according to Kevin Speed, CAE’s vice-president of defence and security for Asia and director of the MPTC.

“This multipurpose training centre is a shining example of Brunei investing to diversify and grow knowledge-based industries that provide high-quality job opportunities,” Speed told media in mid-February. “It will also play a key role as a learning and training hub for the wider South-east Asian market.”

The internationally recognised training centre, whose S-92 simulator has been certified by the European Aviation Safety Authority, as well as aviation agencies in Australia and China, is unique in the region, with a focus on providing multi-disciplinary instruction.

The centre will be looking to capitalise on high demand for helicopter pilots in both the energy and defence sectors to fuel enrolment growth in the years ahead.

Oxford Business Group is now on Instagram. Follow us here for news and stunning imagery from the more than 30 markets we cover.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart

Read Next:

In Brunei Darussalam

Brunei Darussalam: Regional energy cooperation in spotlight

A drive is gathering pace in Brunei Darussalam to increase regional cooperation on energy provision as part of a broader bid by Asia’s oil producers to meet rising demand from nearby fast-growing...

In Transport

Emerging markets are targeting a share of the global electric vehicle...

With electric vehicles (EVs) set to proliferate and become more accessible to drivers around the world, several emerging markets are looking to expand their EV manufacturing.


Urban areas experiment with cooling technologies to combat climate...

With temperatures in cities set to rise in the coming decades, many public and private players in emerging markets are looking to tackle the challenge of extreme heat through technology,...