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NEWS UPDATES Asean Affairs     August 29,  2016  

Brunei needs to grow travel market

WHILE flag carrier Royal Brunei Airlines (RB) is supportive of the ASEAN Open Skies policy, it also acknowledged its potential threat to its operations if there is an unchecked expansion of new carriers in Brunei.

“It is an initiative of ASEAN that we have supported in terms of opening up the markets to and from Brunei. As a national carrier we have to take into account what that means for us. It does provide opportunities to us, Some of the markets that were constrained before, those markets become available,” RB’s CEO Karam Chand said in yesterday’s briefing.

But Chand said the liberalisation of the ASEAN aviation market presents a challenge as the market to and from Brunei is small.

“This is always going to be the case, so the outbound market is quite small and the inbound market at the moment is about 225,000 annually,” he said, citing other destinations such as Singapore handling inbound traffic of some 300,000 per week.

As far as Brunei is concerned, Chand said it is “already very well served”, with RB flying to several destinations on a daily basis.

“Our view is that we should develop the market. We should allow new carriers to come in but let us do it in a manner that is beneficial to everybody, for us, for them (new entries) and for the nation,” he said.

Chand said the visitor arrival market “grows very slowly”.

“We have to account for the supply and demand side. So unless the demand-side visitor arrival changes dramatically, it would have consequences for RB,” he said.

“We have an open mind. We are going to look at this very pragmatically from the best interest of the nation. How do we get more tourists here. Can we add new markets?” he added.

He said to suddenly add a large amount of passenger capacity from another carrier will be detrimental to RB.

“It would be beneficial if the market also grew in line with the growth of capacity. But if you look at say, another carrier in Jakarta for example, if they put a daily flight with an A320 (aircraft), they could increase the capacity by 140 per cent. For this capacity to be absorbed, you would also need to grow the market by the same amount,” he said.

He said markets do not grow at that level of magnitude, with the ASEAN travel market usually expanding at five to six per cent per year.

But Chand said if foreign carriers were to come in from a city that RB does not serve then this won’t affect RB.

“For example, New Zealand or the USA or any other city we do not fly to, we welcome them, we can sign collaborative agreements,” he said.

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