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REMARKS BY
THE HONOURABLE PEHIN ORANG KAYA AMAR PAHLAWAN DATO SERI SETIA AWANG HAJI ZAKARIA BIN DATU MAHAWANGSA HAJI SULAIMAN, MINISTER OF COMMUNICATIONS, BRUNEI DARUSSALAM
AT THE ROYAL BRUNEI AIRLINES GALA AWARDS AND STRATEGIC PLAN LAUNCH NIGHT
25th April, 2003

Bismillahir Rahmanir Rahim
Assalamualaikum Warahmatullahi Wabarakatuh

First of all, I wish to thank Dato Paduka Awang Haji Hazair, Chairman of the Royal Brunei Airlines for kindly inviting me and Datin to this Gala Awards and Strategic Plan Launch Night and giving me a slot to deliver a few words.

Let me first congratulate the Board of Directors and the Management of the Royal Brunei Airlines for the Launching of the Airline’s New Strategic Plan. I am sure, you have spent a great deal of time and efforts and months of careful deliberation preparing it. The Plan will set a new course of action, a vision - to make Royal Brunei Airlines not only a profitable one but more so, an airline we all can be justly proud of.

Royal Brunei Airlines is an important partner in our continuing efforts to make Brunei Darussalam as the Service Hub for Trade and Tourism. We see Royal Brunei Airlines as a prime mover, a principal partner in our efforts to achieve this objective. You can fly more passengers to and through Brunei and bring more cargoes as well.

Events in the past year, with September 11th, and the financial crisis and now SARS posed extremely serious challenges to the airline industry. Many airlines all over the world are facing serious problems forcing them to reexamine their business models and some even have experimented with alternative models in order to survive. The introduction of low cost or budget airlines also posed as a serious competition to the established regular airlines. Airline strategy and planning therefore has generally shifted from the traditional route by route market development to one based on alliances and network markets.

The international air transport industry has always been subjected to global events such as those affecting aviation fuel prices. For example, the events in the past two years resulted in unprecedented loses that stretch the industry to the limit. In the aftermath of the September 11th tragedies, many airlines are facing extra financial burdens to meet the additional costs of aviation insurance and the strengthening of security measures. On top of these security concerns, the airline industry is also confronted with declining demand in the air transportation sector. These, together with the slowing down of global economy, had devastating impacts on the airlines business so much so that some are forced to cut down their services due to the decline in passengers traffic.

In recent weeks, Asian airlines are facing an even greater challenge than September 11th crisis. The outbreak of the deadly Severe Acute Respiratory Syndrome (SARS) in many parts of Asia Pacific, have adversely affecting travel and tourism in the Region forcing many airlines to cut back and cancel flights because of declining traffic.

Passengers cancelled their bookings because of fear of catching the disease during flight. It was reported that Abacus International has lost more than 30% of passenger reservation in the past two weeks compared with a year earlier. In Singapore the visitors arrival has dropped some 56% in the first seven days of April. It was also reported that in the second half of March, Cathay Pacific carried just one third of the passengers it had last year making it the worst plunge in more than 50 years.

In the wake of these crisis, Asian airlines face a drastic drop in earnings as demand for holiday and business travel forced airlines to cut flight across the region. Major airlines such as Cathay Pacific, Japan Air Lines, Thai Airways are cutting back hundreds of flights a week. It is believed that the impact of SARS on passenger traffic make it the worst disaster to hit the airlines industry for decades. The SARS does not only affect passenger traffic but it has disrupted the cargo business. The cancellation of passenger flights resulted in the disruption of the export cargo resulting in delays in delivery and further loses in revenue.

With all these catastrophic incidents, what does the future hold for the airlines industry? While the threat from SARS is still hovering, no one seem to know what the future holds, even analysts could not say for certain how bad things could turn out for the industry in the future. No doubt the fittest airlines will survive, suffering only minor bruises while others might not be so lucky and may have to be eliminated in the process. Let us pray that Royal Brunei Airlines will survive this difficult period and with full support from all, I am sure things will work out well for Royal Brunei Airlines.

Now that the armed conflict in Iraq is drawing to a conclusion, the airline industry at least is sighing with relief, hoping that the threat of terrorism will also be minimised and the cost of aviation insurance and related security measures coming down.

It is now time for airlines to look beyond passenger traffic. There is a great potential to be exploited in the growing and relatively less regulated air cargo sector. Brunei, being strategically located in the middle of the fast growing region, is ideal to be developed as a cargo transhipment hub. Our airport is not crowded. But, we must all work to make this happen. Royal Brunei Airlines, our national airline must play a leading role in this and I know that Civil Aviation Department will give its fullest support. We must exploit every opportunity to ensure our future well-being.

Before I close, let me once again thank the Board and the Management of Royal Brunei Airlines for inviting me and my wife to this Gala Awards and Strategic Plan Launch tonight. With the launching of Strategic Plan, let me wish Royal Brunei Airlines every success in the future and I can add by giving Royal Brunei Airlines an assurance that the Civil Aviation Department and the Ministry of Communications will do everything possible to support and assist Royal Brunei Airlines in the implementation of this new Strategic Plan. Let me also take this opportunity to congratulate all the Royal Brunei Airlines staff who are receiving long service awards, merit awards, etc this evening. I also wish to congratulate those pilots who have been promoted to Captains. I know you have a very heavy responsibility sitting in the cockpit but I know you all are well-trained and will be able to look after the safety of your passengers.

Wabbillahi Taufik Walhidayah, Wassalamualaikum Warahmahtullahi Wabarakatuh.

Thank you.

(c) Ministry of Communications