Dermot Mannion, Former Deputy Chairman, Royal Brunei Airlines (RB): Interview

Interview:  Dermot Mannion

To what extent can Brunei Darussalam be a competitive air transport hub in South-east Asia?

DERMOT MANNION: Geographically Brunei Darussalam is well positioned as a potential gateway to both ASEAN countries and northern Asia. Additionally, the finalisation of the refurbishment of Brunei International Airport (BWN) is an important element to take into consideration. With an ultra-modern airport facility, transit passengers, international travellers and passengers from the region are all now very comfortable spending time at BWN. The infrastructure is excellent.

As an airline, RB is increasingly moving towards an ultra-modern fleet of aircraft. While we already have the Boeing 787 Dreamliner, we are also beginning a programme of introducing new Airbus aircraft to the short-haul fleet. Recently, we have taken delivery of two new A320 aircraft. In addition, we have seven A320neo aircraft joining the fleet, starting from 2017.

How can full-service carriers (FSCs) compete in pricing with low-cost carriers (LLCs)?

MANNION: Demarcation lines between FSCs and LCCs are becoming blurred. In RB’s case, we offer very competitively priced products versus the LCCs. Indeed, our experience has been that an FSC with the right schedule and high aircraft utilisation levels can offer a very compelling product. The combination of being close on price, but with better service and a better schedule, always wins the day. Already, we compete with Air Asia and Cebu Pacific, and we do so effectively. Unlike in Europe, where short-haul travel is much more of a commodity product, there is still a demand for business-class services on short-haul flights in South-east Asia, especially for government and senior business travellers. From a consumer point of view, the great thing about this region is that everyone is competing for everything. Not only are airlines competing with each other, but competition between airports is also intense. This is the fastest-growing area in the world for air transport, so there is real competition, which is good for the consumer.

What can be done to encourage passengers in transit to visit Brunei Darussalam?

MANNION: One of our strategies in recent years has been to create a two-centre holiday programme, which allows passengers to spend some time in Brunei Darussalam and then go on to other attractive destinations in the region, such as Bali. Indeed, this has proven to be a very attractive combination for passengers from the Chinese market. Chinese visitors like the idea of a experiencing a couple of days of rainforest and ecotourism in Brunei Darussalam. This is a unique experience for them, and is followed by a visit to a more traditional holiday destination.

Brunei Darussalam as a tourism market is in its infancy, which is a good thing, because passengers around the world are looking for new, unspoiled destinations. Therefore, there is potential to grow visitor numbers in the future.

In which ways can cargo-related activities be increased in Brunei Darussalam?

MANNION: In terms of physical capability, BWN has the scope to develop strong cargo activity levels. As such, we are looking forward to seeing the development of future cargo infrastructure. The availability of physical space at BWN is something that none of the other major airports around the region have. So this can create a competitive advantage for Brunei Darussalam in the short-to-medium term. Currently, RB generates less than 10% of its revenue from cargo, so there is tremendous scope to grow activity in this market segment over the next five years. Asia in general is a very active region for cargo, but it is all about creating an efficient airport model where you can trans-ship payloads as efficiently as possible. In that sense, RB and BWN are well placed for the future.