| James Kon |
ROYAL Brunei Airlines (RB) yesterday signed financing deals for eight aircraft worth over BND1.3 billion (USD1 billion) with Bank Islam Brunei Darussalam (BIBD) and Baiduri Bank, at a landmark ceremony witnessed by Minister of Finance II Dato Seri Paduka Dr Awang Haji Mohd Amin Liew bin Abdullah.
The deals include the Islamic financing of a Boeing B787-8 and five Airbus A320neo through BIBD and the conventional financing of two Airbus A320neo through Baiduri Bank.
“I hope this is the first of many financing transactions not only between local banks and government-linked companies (GLCs) but also with the larger Brunei economy. Deals such as these are in line with the Darussalam Assets’ (DA) mission to build a sustainable foundation to spur economic vitality in harmony with nation-building objectives,” said the guest of honour Dato Seri Paduka Dr Awang Haji Mohd Amin Liew.
“As an active shareholder, Darussalam Assets will always strive to inspire and institute corporate excellence in our GLCs to ensure that they have the necessary financial sustainability and corporate governance to participate in transactions like these.
“As the national carrier of Brunei, the impression RB gives in terms of its service and product offerings is paramount in showcasing what Brunei has to offer. In a highly competitive and dynamic industry, the service we aim to provide reflects our timeless values, culture and heritage, ensuring our customers enjoy a unique experience when they fly with RB.
“The journey to rejuvenate the airline to obtain and maintain high levels of customer experience started several years ago which led to the transformation of RB into what it is today. The introduction into service of the A320neo to Singapore is the latest step in unifying RB product offerings on both long-haul and short-haul flights, offering passengers a seamless experience with modern, up-to-date interiors, providing best-in-class cabin services, whether flying in business or economy. Once all the aircraft are delivered by the second half this year, RB will have one of the youngest fleet in Asia.
“Other aspects of the economy that will be impacted positively are job creation and connectivity. New pilots would need to be trained. New cabin crew would need to be hired. Engineers would be given the opportunity to increase and enhance their technical ability. RB has always attracted local young talents who embody the spirit and cultural values unique to Brunei,” the minister said.
“The upskilling and development of workforce is essential in the creation of a modern economy to achieve Vision 2035,” he added.
In terms of connectivity, the Minister of Finance II said, “RB already operates direct to 17 cities and several others through code sharing and other arrangements with more to be added in the upcoming months. From Melbourne, London, Seoul to Bali, RB as the nation’s flag carrier proudly connects Bruneians to the rest of the world, promoting cultural exchanges and facilitating trade.
“More direct flights means that Bruneian entrepreneurs and micro, small and medium enterprises have greater access to the global market,” he added.
With the new A320neo at the background, signing the financing deal on behalf of RB was its Chief Executive Officer Karam Chand, while representing BIBD was its Managing Director Mubashar Khokhar. The Chief Executive Officer of Baiduri Bank Pierre Imhof inked on the dotted line on behalf of his bank.
Karam Chand highlighted, “The combination of conventional financing for two aircraft with an Islamic financing structure for six other aircraft allowed Royal Brunei Airlines to achieve attractive terms to finance a significant portion of the total aircraft cost.
“The contract negotiations and approvals for aircraft financing were achieved in record time which is a testament to the solid efforts put in by the teams from RB, BIBD, Baiduri and DA. The collaboration is a very significant one for the three iconic Brunei brands, given the magnitude of the transaction with Airbus and Boeing. The eight aircraft are valued in excess of USD1 billion at list prices.
“Through this historic partnership, we hope to inspire other local companies to embark on similar strategic collaborations and create value for themselves and the Brunei economy,” Karam Chand added.
Meanwhile Mubashar Khokhar said, “Alhamdulillah, I would like to congratulate Royal Brunei Airlines on another national milestone with the latest additions to their fleet and also becoming our latest ‘partner in growth’. Together may we continue to support Brunei Darussalam’s economic diversification while strengthening the country’s positioning as a regional hub for economic activity and trade. The acquisition of these aircraft is also another landmark transaction for Brunei’s Islamic banking and financial industry in general as it highlights our local capabilities to deliver on large complex Islamic transactions.”
Pierre Imhof, highlighted, “Baiduri Bank is proud to enter this partnership with RB where we will be financing two units of Airbus A320neo aircraft. As a major local bank with a strong commitment to the Brunei market, Baiduri Bank will continue to play an active role in providing financing to businesses, contributing to the economic growth of the country and its development programmes to meet the goals of Brunei Vision 2035.”