BANDAR SERI BEGAWAN – Royal Brunei Airlines could suffer hundreds of millions in lost revenue as the coronavirus pandemic poses an unprecedented crisis to the global airline and travel industry.
“Nobody knows how long this is going to last, but even when COVID-19 goes away, the travel industry might not immediately come back,” Second Minister of Finance and Economy Dato Seri Setia Dr Hj Mohd Amin Liew Abdullah told media on Tuesday.
Already reeling from a steep decline in bookings from China, travel restrictions around the world have led to a collapse in passenger demand for RB, with the Brunei government also banning all inbound and outbound travel to contain the spread of the virus within the sultanate.
The airline has cut 95 percent of flights, only retaining four routes — Singapore, Melbourne, Hong Kong and Manila — to maintain essential trade connectivity for food, medical supplies and other consignments.
“The financial implications are going to be huge… Operations have been reduced by 95 percent,” said the minister, who also serves as chairman on RB’s board of directors.
Last week, the airline told its 1,750 employees that they would be required to take compulsory paid leave From April 1 to May 31, and only a small number of staff would be retained to operate the reduced flying programme.
YB Dato Dr Hj Mohd Amin said RB has not retrenched anyone, but that staff would be put on annual leave for the next two months.
“We have not sacked anyone. We have not asked people to go on unpaid leave, at least not forcing them. If they want to take unpaid leave, of course it’s based on a voluntarily arrangement.
“So unlike many other airlines who have the flexibility to terminate or ask people to go on unpaid leave, Royal Brunei hasn’t done that.”
The flag carrier has asked staff to utilise paid leave days so they can still receive their monthly salary, and has said they will be able to pull forward some leave from the next financial year if necessary.
“Hopefully when COVID-19 goes away, travel industry can start to recover. Our people can work hard and concentrate on helping the company. The company was suffering already, even before COVID-19,” the RB chairman said.
“This is not normal time that everything you need to berkira-kira (count).”
YB Dato Dr Hj Mohd Amin was speaking alongside the minister of health at the daily press briefing on the coronavirus outbreak.
When asked if any of the government’s financial relief measures, such as loan deferrals, would be applicable to RB, a government-linked company, the finance and economy minister said the measures only applied to MSMEs in the private sector.
“Other businesses can still go to the bank if they have difficulties, negotiate and see how they can help you to restructure.”
In 2018, the airline inked a substantial financing deal with Bank Islam Brunei Darussalam and Baiduri Bank to purchase eight new aircraft valued at list price for $1 billion. The fleet renewal was part of RB’s wider strategy to expand its network in East Asia and introduce a non-stop service to London.
“Royal Brunei will continue to be here. We need Royal Brunei to continue to stay healthy and to continue to operate and provide job,” the minister said.
The International Air Transport Association has said the COVID-19 pandemic could spell “apocalypse” for the airline industry without urgent government aid, warning that carriers could lose more than US$250 billion if severe travel restrictions remain in place for three months.
Globally, some 2.7 million airline jobs are at risk, with 24 times that number of jobs on the line down the travel and tourism value chain.