Transit Opportunities

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The government wants to develop Brunei into a trans-shipment and cargo hub for the East Asia Growth Area (EAGA), a region that includes Brunei, Indonesia, Malaysia and the Philippines. In particular, the ministry of communications has recognised the importance of improving and expanding the facilities at Brunei International Airport (BIA) to cope with increased transit and cargo traffic.

Developing direct air and shipping links between countries in the region is aimed at boosting bilateral trade. Last year, Brunei and the Philippines saw a rise in trade to $10m due, at least in part, to more direct transportation links. Philippine ambassador to Brunei, Virginia Benavidez, told a local newspaper, "We have been working with the Brunei government to encourage the opening of direct sea and air routes to Mindanao, where there are plenty of exportable products."

According to an airport master plan proposal, the passenger and cargo terminals at BIA have been targeted for expansion, a project that is expected to begin in late 2008. The primary focus is on three areas: creating an airline hub, an airport city with hotels and other amenities, and a cargo village.

Not only is BIA the sole air gateway to Brunei, it also serves as a regional hub for transit traffic destined for neighbouring countries.

The director of the department of civil aviation, Abdul Rahman Ismail, told OBG, "We are facing a problem during peak hours. We have so many planes coming in and out at the same time that it's beginning to strain our infrastructure. We are reaching our capacity, which is why we need to expand the terminal building."

In addition to infrastructure development, the government is looking to expand its export market. Aside from oil and gas, the market is relatively small and the government hopes to improve this by focusing on the potential of marketing Brunei as a transit cargo hub as well as facilitating trade to export markets. One possibility is to take advantage of the opportunity to capitalise on cargo moving from countries in the north, such as Japan, to south-eastern nations.

The general manager of the Brunei International Air Cargo Centre, Ariffin Emran, told OBG, "We would like to use Singapore as a model for becoming a trans-shipment hub to see more cargo passing through Brunei. That way we are not so dependent on a large industry base to support this model - but of course we need a sizeable demand."

Ariffin said, "Our main long-term objective in developing Brunei into a hub is to own our own air freighter as it could greatly boost throughput and exports." A freighter would facilitate the movement of people, goods and services and help revitalise the EAGA.

To kick-start the airport expansion project, the department of civil aviation has announced plans to hire a consulting firm to prepare a project plan with objectives, budget, resources and organisation structure.

The national air carrier, Royal Brunei Airlines (RBA), is also expanding and enhancing its operations in preparation to serve a larger airport. RBA is replacing aircraft from its existing fleet with new Boeing 787 aircraft that are scheduled to arrive in 2009. Beyond this, the airline is considering new destinations. RBA's chief executive, Haji Ahmad Ibrahim, told OBG, "We are continuously assessing new destination options. However, we have to balance our own capabilities with what is feasible. Equally, we don't want to enter into a market where there are too many players. We'll be looking to capitalise on a niche market."

In addition to RBA, BIA currently services Malaysian Airlines, Singapore Airlines, Thai Airways and Air Asia. The department of civil aviation is considering inviting additional airlines to Brunei once the airport's capacity has been increased. It is already looking at existing air service agreements and identifying a number of smaller airlines that may be able to take advantage of Brunei's position in the region.

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