Monday, December 19, 2011

Royal Brunei Airlines Saga


Few days ago, RBA announced staffs layoff as part of its "stabilization" plan. Further reading can be found on the following link - http://brudirect.com/index.php/Local-News/laid-off-staff-lament-rba-restructuring.html

To me RBA had forgotten its true purpose. If we were to look into the history, RBA was created and tasked by the government to build connectivity and enhance economic activity for the country by the provision of high-quality, competitively priced flights to destinations in Southeast Asia and around the globe. As time goes by we forgot about it. Instead we are increasingly diverging from the narrow private profit interests of the company. Thus, RBA is now embarking a policy of returning to its roots which involves a series route suspensions and staffs layoff. This race to the bottom and cost-cutting mentality is leading the low-price airlines to trial stand-up “seats” and other service-diminishing angles. It is hardly the outcome we want for our national carrier.

My view is that our government should fully "nationalize" RBA and recreate its role as the iconic national carrier operating to maximize Brunei interest. Because every time a state-owned airline sells a ticket we must realize that the “revenue” it generates will be much larger than the difference between the ticket price and the cost of providing that seat. Every tourist RBA bringing in would be spending in a range of small and other businesses and generating employment throughout the economy. 

I sincerely believes that if RBA is fully "nationalize" then it would have an incentive to provide high quality attractive services. And importantly continue to offer the population secure and well-paid jobs and it would be truly a national icon - working to serve us all.