Mannion: Royal Brunei Airlines will be looking at joint venture opportunity

Royal Brunei Airlines may seek out an equity partner next year, according to the deputy chairman of the Far East carrier, Dermot Mannion.

The former Aer Lingus chief executive has been running Royal Brunei since 2010. He left the Irish airline in 2009.

Mr Mannion said that the past two years had been spent right-sizing Royal Brunei in the face of steep competition in south-east Asia. The number of staff at the airline has been reduced from 2,000 to 1,500, while about $100m (€73m) has been cut from its cost base.

This morning, the state-owned airline inaugurates its first Boeing 787 Dreamliner on its London-Dubai-Brunei route.

Mr Mannion said the new aircraft would cut fuel costs by about 20% compared with the current Boeing 777 that it used on the route.

Royal Brunei will take delivery of another two Dreamliners between January and February, and by April next year aims to be the first airliner to use an all-787 aircraft-fleet on its long-haul network.

The airline will also use the Dreamliner on its service to Melbourne. It also flies to cities such as Hong Kong and Manila. Routes the carrier used to operate, such as Auckland, Brisbane and Perth, were axed by Royal Brunei so it could focus on core services.

PARTNERSHIP

The Asian sultanate has a population of just over 400,000 and lies at the northern part of the island of Borneo.

Mr Mannion said a decision about an order for about 10 short-haul aircraft would be made by the end of the year. He said he’d be holding meetings with both Boeing and Airbus officials in the next two weeks to finalize an order.

Asked if he’d be open to developing close ties with a larger carrier via either a partnership or another airline taking a stake in Royal Brunei, Mr Mannion said he would explore such opportunities next year.

“We will be looking at a joint venture opportunity and a cross-equity shareholding,” he said. “We’ll look at that in 2014. It will be the next phase of development.”

He said such options would suit Royal Brunei “strategically”.

He added that Royal Brunei was “open to having dialogue” with other “like-minded” airlines.

Emirates, where Mr Mannion worked before joining Aer Lingus as CEO, has a major partnership with Qantas to drive long-haul traffic on the so-called kangaroo route between Australia and Europe. Etihad, which has a 3pc stake in Aer Lingus, has a near-20% stake in Virgin Australia.

Etihad has been snapping up stakes in airlines from Air Berlin to Air Serbia and India’s Jet Airways as it seeks to drive more passenger traffic through its home hub of Abu Dhabi.