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Royal Brunei Begins Restructuring  
User currently offlineGSTBA From UK - England, joined Apr 2010, 465 posts, RR: 1
Posted (3 years 3 months 1 week 6 days 7 hours ago) and read 6855 times:

Royal Brunei Airlines has announced they will cancel a total of 5 routes before the start of the W11/12 timetable.

The destinations that are to be cut are:

AKL - From 30th OCT 11
BNE - From 28th OCT 11
PER - From 29th OCT 11
KCH - From 01th AUG 11
SGN - From 30th OCT 11

The cuts will leave MEL as the only destanation still served in Australia. The cuts will also see RBA no longeer serving New Zealand or Vietnam.

http://www.bruneiair.com/blog/2011/0...ons-as-part-of-stabilisation-plan/

37 replies: All unread, showing first 25:
 
User currently offlineZKNCL From New Zealand, joined Oct 2010, 291 posts, RR: 0
Reply 1, posted (3 years 3 months 1 week 6 days 7 hours ago) and read 6714 times:

Well this is sad- One less airline serving AKL  

ZKNCL


User currently offlinegardermoen From Australia, joined Jul 1999, 1522 posts, RR: 1
Reply 2, posted (3 years 3 months 1 week 6 days 7 hours ago) and read 6690 times:

Dropping PER and BNE ? They are the two main long haul routes that did well. BNE was built up so well over the past 20 or so years.
Where does RBA plan on deploying all this extra capacity?

Sounds somewhat odd.


User currently offlinefauzi From Brunei, joined Jul 2005, 219 posts, RR: 0
Reply 3, posted (3 years 3 months 1 week 6 days 6 hours ago) and read 6634 times:

This came as a surprise for me, especially AKL, BNE and PER. I guess Mr Dermot has something up his sleeves...

This would mean they've got at least 1 B772 and 1 A319/320 and that's a lot of spare capacity. Any ideas what they're going to do with them, or where they're going next?

Hope they increase MEL, and possibly open up a route to China or India.



BI - The Asian Underdog
User currently offlineFuling From Australia, joined Apr 2011, 187 posts, RR: 0
Reply 4, posted (3 years 3 months 1 week 6 days 6 hours ago) and read 6623 times:

Yea, I am also very surprised about BNE and PER. and to keep MEL that has only been in operation for a few months. Mind you, it still seems logical. But still, why BNE?

User currently offlineMillwallSean From Singapore, joined Apr 2008, 1257 posts, RR: 6
Reply 5, posted (3 years 3 months 1 week 6 days 6 hours ago) and read 6608 times:

No big surprise here.
Not sure what happened two years ago when certain managers started pipedreaming about new destinations and a new fleet. Most in the know knew that it would be a financial disaster but their voices and opinions were brushed aside.
Well...
Good to see that financial sense has prevalied in the end. Rather draconian cuts though. Must be very bad.
The constant sales campaigns since the introduction of the 777:s made it easy to understand that the increase in seats was a very very bad idea.

I heard that MEL is kept because it would be very expansive to pull the route now. Otherwise it would have been a goner.

I am surprised Shanghai was kept.

I dont know what to say. I forsaw this (not to hard) when the new planes and new plans were presented can be seen on my previous posts. But I am not at all happy to the contrary this is sad and makes my montly AKL commute more expensive.

What we can hope is that BI finally has learnt that even the thought of chasing the kangaroo route is a bad one.
Asia to Australia-NZ can work, but not with 777:s. With Air Asia and Jetstar taking a big pie of BI:s lowest price market its getting harder for everyday to be BI.

787? An order that must be in doubt now. Even with the 777 the route to LHR isnt nonstop, just not financially viable to have that route going nonstop. Filippina/Indo workers to Dubai at least fills up some seats.

[Edited 2011-06-21 03:16:24]


No One Likes Us - We Dont Care.
User currently offlineIndianicWorld From Australia, joined Jun 2001, 2985 posts, RR: 0
Reply 6, posted (3 years 3 months 1 week 6 days 6 hours ago) and read 6530 times:

Quoting MillwallSean (Reply 5):
I heard that MEL is kept because it would be very expansive to pull the route now. Otherwise it would have been a goner.

That doesnt really make sense TBH. How so?? If it was doing badly, it would go IMHO, as to not lose more cash.

Strange to see BNE and PER go though.

One thing though, the more they cut, the worse things will likely get. The connection possibilities are the only thing that gives them a chance to fiill some flights, and taking them away will just put more pressure on other sectors.

[Edited 2011-06-21 03:33:07]

User currently offlineNZ107 From New Zealand, joined Jul 2005, 6433 posts, RR: 39
Reply 7, posted (3 years 3 months 1 week 6 days 6 hours ago) and read 6510 times:

The 772 is far too big for them to serve the likes of AKL. Even TG and MH have operated their 772s at the same frequency as BI. I can only see them returning if they get a 788 or similar. They still possess the 5th freedom rights to AKL - I'd like to see them open up AKL-MEL.

It's a shame.. Having to stop over in BWN for a lot of connections may have put people off too.



It's all about the destination AND the journey.
User currently offlineMillwallSean From Singapore, joined Apr 2008, 1257 posts, RR: 6
Reply 8, posted (3 years 3 months 1 week 6 days 6 hours ago) and read 6484 times:

Quoting IndianicWorld (Reply 6):
That doesnt really make sense TBH. How so?? If it was doing badly, it would go IMHO, as to not lose more cash.

Again this is not my specualtion this comes from people working at BI. How true it is only they know but Brunei is a rather small place...
They have alot of contracts that will cost alot to break making the cost to get out of the route higher than the losses.
See for it to be gone in 2012 if there are no new initiatives.

Perth I am not surprised at all about. Been down to A320 for a reason.
Maybe i thought they would have reverted back to Brunei-Brisbane-Auckland.



No One Likes Us - We Dont Care.
User currently offlineIndianicWorld From Australia, joined Jun 2001, 2985 posts, RR: 0
Reply 9, posted (3 years 3 months 1 week 6 days 6 hours ago) and read 6432 times:

^^ Who knows. Maybe it doing better than people expect to MEL, but I also have my doubts.

It may have to do with incentives, but it would likely have been cut too if things were doing really bad, incentives or not. Seems like they chose to keep MEL over the other 2 for whatever reasons.


User currently offlineFuling From Australia, joined Apr 2011, 187 posts, RR: 0
Reply 10, posted (3 years 3 months 1 week 6 days 6 hours ago) and read 6398 times:

Quoting MillwallSean (Reply 8):
Maybe i thought they would have reverted back to Brunei-Brisbane-Auckland

Yes I would have thought the same too. Maybe made a BWN-BNE-AKL and a BWN-MEL-AKL route on alternate days. Who knows the reasons, but it must have been sad to do it.


User currently offlineLondonCity From United Kingdom, joined Nov 2008, 1496 posts, RR: 0
Reply 11, posted (3 years 3 months 1 week 6 days 5 hours ago) and read 6236 times:

Quoting MillwallSean (Reply 5):
Not sure what happened two years ago when certain managers started pipedreaming about new destinations and a new fleet. Most in the know knew that it would be a financial disaster but their voices and opinions were brushed aside.

The kangaroo route is probably the most competitive long-haul service in the world. For any airline to survive today you need both deep pockets and a talented marketing team. I don't know how deep are BI's pockets nowadays but its marketing and promotion are non-existant in the UK.

So did BI think it could compete for Australasian traffic with the likes of EK, EY and QR let alone all the other Asian carriers plus LCCs like Air Asia X and Jetstar ?


User currently offlineKFlyer From Sri Lanka, joined Mar 2007, 1226 posts, RR: 0
Reply 12, posted (3 years 3 months 1 week 6 days 5 hours ago) and read 6130 times:

I have always wondered why they even served AKL. An airline that flies to London with a stop on the way, really should not get serious about the Kangaroo route. BI could have done well with AKL if they had a considerable network in Europe, a very competitive schedule and a good product. They had none.
It seems to be another classic case of being too ambitious.
But I don't see the point in cutting PER and BNE over MEL. I was under the impression that PER was one of the routes that worked for them.
But what if these cuts are seasonal?



The opinions above are solely my own and do not express those of my employers or clients.
User currently offlineBen175 From Australia, joined Jul 2008, 699 posts, RR: 0
Reply 13, posted (3 years 3 months 1 week 6 days 4 hours ago) and read 6103 times:

Oh no! I love seeing the BI 772 and 320 in PER. I guess this means good for MH's new PER-BKI service...

User currently offlineTG992 From New Zealand, joined Jan 2001, 2910 posts, RR: 10
Reply 14, posted (3 years 3 months 1 week 6 days 3 hours ago) and read 5872 times:

I've heard the Sultan had interests in either dairy farms or dairy companies here in NZ and they carried a lot of related cargo, hence serving AKL.

Loads since they started AKL-BWN direct have been pretty dire, with 40-50 passengers not atypical



-
User currently offlinefauzi From Brunei, joined Jul 2005, 219 posts, RR: 0
Reply 15, posted (3 years 3 months 1 week 6 days ago) and read 5611 times:

Quoting TG992 (Reply 14):
Loads since they started AKL-BWN direct have been pretty dire, with 40-50 passengers not atypical

BWN-MEL is always around 50-60%, but return is empty! I heard there is zero marketing campaigns for the new route in MEL.

I have a sneaky suspicion that they're going to concentrate on purely regional routes, except for LHR and JED. I heard from somewhere that they looked at MI 's business model, how they're small but profitable airline. Small profits, but still a profit.



BI - The Asian Underdog
User currently offlineMillwallSean From Singapore, joined Apr 2008, 1257 posts, RR: 6
Reply 16, posted (3 years 3 months 1 week 5 days 22 hours ago) and read 5504 times:

In regards to Brunei's imports from NZ they are rather small.
Its mainly dairy products and are only about 1% of the total food imports for Brunei (2008). So that should not be even near enough to keep a flight sustainable.

Quoting KFlyer (Reply 12):
I have always wondered why they even served AKL.

You will find more than one answer. At first I would say Brisbane needing more patrons and a tag on across the Tasman was popular since they could pick up pax for this sector. the plane tended to be much more full across the tasman than from Brisbane to brunei usually. That was a couple if years ago.

Why they started direct service is a better question and then the one we all scratched our heads around, why they upped the frequency. It really wasnt warranted.
I dont remember when it started, seem to recall that in Autumn 2009 they still went through Brisbane on some flights and some nonstop. I used to call it the beerstop...

Auckland, Perth and Brisbane should see similar stories on why they were attractive as markets. I use Auckland as the example but you can exchange it with the other two.
Auckland is a major migration, education and tourist destination for many of the destinations BI serves.
One example for BKI or Sabah as a whole Auckland is the second largest outbound educational and migration market. For Borneo inhabitants or East Asia inhabitants, connecting in KUL or SIN etc adds two hours of flighttime in comparison to a connection in BWN. BI would usually substantially undercut or the established players on routes to these three destinations.
I guess they reasoned that take Sabahans, Manilla, Saigon, HongKong bargainhunters, kangaroo traffic, leisure BKK travellers and some Sarawakiens and it should be enough of a market to AKL. Add on the outbound NZ market. A cheap option for kiwis wanting to go to London, BKK, BKI and Manilla and you had a decent sized market. It rarely were a decent market though and despite lots of sales through all big agents and all ethnic agents they didnt really gain any other traction than becoming the airline of choice for the bargainhunters.

Sure they had peak seasons - start of school semesters, Christmas holidays etc but average fares tended to be very low.

Perth has seen the entrance of almost all of SE Asias lowcost airlines and is thus a very difficult market these days. Outbound market is virtually dead. Ill stick my neck out and say MH wont have better luck on its very questionable BKI-Perth...

Air Asia X and Jetstar have announced service to NZ.
From Australia you have Air Asia X ad Jetstar already.
BI were even squeezed out of the lowest fare market so where should they retreat to?

Looking at a modelling of Silkair plus service to London seems like a very good idea. More Realistic
Brunei has something like 350.000 people sure they are moire wealthy than almost all other Asians, but its a very small market with very few corporations. Also on regional routes not all prefer BWN. The oil town KB is much closer to Miri in Malaysia.
Air Asia retimed its Miri-Singapore flight after realising the surge of Brunei bookings on this route.

Jeddah I am not that sure about, its a migrant (Phil and Indo) express route, not a market known for high yields.



No One Likes Us - We Dont Care.
User currently offlineflytuitravel From United Kingdom, joined May 2007, 723 posts, RR: 0
Reply 17, posted (3 years 3 months 1 week 5 days 22 hours ago) and read 5471 times:

Quite surprised to see them cut the aus/NZ network so drastically. I thought that BNE was one of the better performing routes for them ? Interested to see where they go from here. Can't see MEL lasting long as the sole Australian destination. They are going to have a lot of excess capacity so I assume some of the 777s will be returned back to SQ come autumn.

User currently offlineIndianicWorld From Australia, joined Jun 2001, 2985 posts, RR: 0
Reply 18, posted (3 years 3 months 1 week 5 days 22 hours ago) and read 5468 times:

^^ I can confirm that BI really have done very little in advertising the MEL flights here. Pity, but even if they did, what can they offer which isn't already in play into this market? Their route network is limited and can only really chase low yield pax to fill flights. Not really a recipe for success.

In a way, it's likely best they look at some sort of merger or co-operation with another carrier. The industry has evolved so much that BI has been left behind. It's limited home market, and the more alarming issue of it's lack of relevance of connection options leaves many concerns.

Unfortunately, it might be time for management to look outside the square, as the carrier is going to struggle to find any real successful niche IMHO.


User currently offlinefauzi From Brunei, joined Jul 2005, 219 posts, RR: 0
Reply 19, posted (3 years 3 months 1 week 5 days 22 hours ago) and read 5392 times:

Quoting MillwallSean (Reply 16):
Jeddah I am not that sure about, its a migrant (Phil and Indo) express route, not a market known for high yields.

I quoted JED and LHR because there would be some "national" interest in retaining these routes.

Quoting MillwallSean (Reply 16):
Air Asia retimed its Miri-Singapore flight after realising the surge of Brunei bookings on this route



AK also now has twice daily flights between BWN - KUL, and MH is looking to restart BWN - BKI via its subsidiary MASWings. So BI would need to take a step back and look at their options carefully, which is what they've done in cancelling the mentioned routes.

Also BI has a ridiculously large amount of staff for a relatively small fleet. They've got 1900 staff at the moment according to their website, which translate into 190people/plane. On the other hand SQ has 14000 staff, so that's 130people/plane.

I guess Dermot Manignon has the balls to challenge the BoD to restructure the airline, just like how he pushed EI back then.



BI - The Asian Underdog
User currently offlinecchan From New Zealand, joined May 2003, 1762 posts, RR: 2
Reply 20, posted (3 years 3 months 1 week 5 days 11 hours ago) and read 4983 times:

Now that they are going to cut AKL, BNE, PER, where would their LHR passengers come from? If my understanding is correct, passengers from or to AKL, BNE and PER do fill up a substantial number of seats on their LHR flights.

User currently offlineMillwallSean From Singapore, joined Apr 2008, 1257 posts, RR: 6
Reply 21, posted (3 years 3 months 1 week 5 days 10 hours ago) and read 4929 times:

Quoting cchan (Reply 20):
If my understanding is correct, passengers from or to AKL, BNE and PER do fill up a substantial number of seats on their LHR flights.

Yes and no, depends on the season and what flight your on.
However non of these kangaroo-route passengers makes any profit for BI. (or didnt when I had access to numbers)

Rumours have been going round for quite sometime about these cuts. They were intitally expected in March. The rumours said that BI would pull out of all longhaul (except maybe London). Same rumours said planes would leave the fleet when leases expired and that the order for 787:s would be cancelled. The ex SQ manager werent happy. Some other cuts have already taken place. If the rumours are to be believed this is phase one, phase two involves new fleet, new businessmodel and a few other amendments plus a cancellation of MEL etc.

Fauzi is 100% correct the airline is way overstaffed and overequipped. Overseas offices in every city served. The operation is not sustainable so a few drastic cuts wont hurt. Then the airline can come back stronger, leaner and better equipped. But its a lot of politics in BI so I hope these cuts have the backing they need. Some middle level mangers, some old and comlianing expat pilots will as usual drag their feet and resist but as long as the top men have said ok it will happen.

London will be the last longhaul to be cut for a few obvious reasons. Shell, history, military traffic (never felt more safe than the time it was me plus about 80 gurkhas on a BI flight between BWN-BKK hehe) and the royal familys close connections with the UK being some of them.



No One Likes Us - We Dont Care.
User currently offlineaerorobnz From Rwanda, joined Feb 2001, 7210 posts, RR: 13
Reply 22, posted (3 years 3 months 1 week 5 days 9 hours ago) and read 4769 times:

Quoting TG992 (Reply 14):
I've heard the Sultan had interests in either dairy farms or dairy companies here in NZ and they carried a lot of related cargo, hence serving AKL.

Not to mention that his Daughter has been studying down here I think...


User currently offlinecchan From New Zealand, joined May 2003, 1762 posts, RR: 2
Reply 23, posted (3 years 3 months 1 week 5 days 8 hours ago) and read 4661 times:

Quoting MillwallSean (Reply 21):
The rumours said that BI would pull out of all longhaul (except maybe London). Same rumours said planes would leave the fleet when leases expired and that the order for 787:s would be cancelled.

IMHO, keeping 1 or 2 widebody aircrafts for the LHR route alone may not be the best option for BI if all other long haul routes are cut. BWN-LHR is not a big market, and strong competitor are already around for LHR to other Asian cities BI flies to.


User currently offlineLondonCity From United Kingdom, joined Nov 2008, 1496 posts, RR: 0
Reply 24, posted (3 years 3 months 1 week 5 days 6 hours ago) and read 4564 times:

Quoting fauzi (Reply 15):
BWN-MEL is always around 50-60%, but return is empty! I heard there is zero marketing campaigns for the new route in MEL.

There is a "zero marketing campaign" in the UK for all BI's Australasian destinations. No wonder they aren't as successful as they could be.


25 gardermoen : Surely their LHR flights will take a beating too with a drop in connecting PER/AKL/BNE traffic. Could this then lead to a cut back in their LHR servic
26 Flyingsottsman : Very suprised that MEL stayed on their radar, BNE and PER have had a histroy with BI serving both those capitals while MEL only had a few charter flig
27 fauzi : I guess since they've just started MEL, it would be pretty expensive to cancel the routes as I would assume there would be penalties for cancelling t
28 eta unknown : MEL kept because of VIC Govt. subsidy. More cuts coming (restructure phase 2)... some will surprise you!
29 aviasian : Does anyone know the fate of those six B777-200s leased from Singapore Airlines? If Melbourne is kept solely because of the subsidy (assuming that the
30 IndianicWorld : I don't think any cuts with BI will surprise anyone? Is there really anything else left? It's like QF saying they will make major changes with cuts li
31 aerorobnz : Not to mention a recently negotiated ground handling contract that they would be nailed for if they didn't keep it going for a while.
32 aerokiwi : The Brumby Government was gung-ho about subsidising aviation in Victoria. Tiger at Avalon, alongside Air India and Royal Brunei at Tullamarine. Not a
33 IndianicWorld : ^^ All these deals , not just in aviation, are questionable value at times. It's always a risk, designed to try and gain maximum value from something
34 eta unknown : At least 3 being returned to SQ end Oct... You're on the right runway...
35 fauzi : Do you know which 3 planes will be returned?
36 aerokiwi : Except governments aren't in the market for putting public monies at risk. At least, they're not supposed to be. Wow sounds pretty serious if they're
37 IndianicWorld : ^^ Govts are in power to deliver maximum opportunities to it's citizens. With that in mind, such investments are required at times to deliver on that
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