GOH
30th Apr 2003, 00:56
Allo all
I just wanted ot share this with you, well the people that havnt read it already! :p
The following is from Royal Brunei Airlines(http://www.bruneiair.com/news/290403(2).html)
29th April 2003
Speech by RBA CEO, Peter Foster, at the RBA Gala Awards and Strategic Plan Launch Night, 25 April 2003
Therefore in order to achieve sustainable growth, the Board directed the management to put together a road map, to plan the future in as coherent and as detailed a way as possible.
Following this directive, management spent the period from September 2002 to March 2003 putting together the company's Strategic Plan. Before I discuss the key details of the plan I would like to make two points:
Firstly, this was a genuinely company-wide effort, with many people from all departments involved in the various project teams - 52 RBA managers and staff in all. I would like to thank each and every one of you for your efforts.
Secondly, the plan's financial projections run for 5 years and the fleet plan for 10 years. Now of course, we recognise that things will change during the lifespan of the plan. Unexpected events happen - witness the outbreak of SARS - which can combine and conspire to upset even the best-laid strategies. We know that as time passes, we will need to make alterations, to trim or tighten our sails here and there on account of prevailing conditions. Nevertheless, the overall objectives defined in the plan must remain constant if we are to achieve our long-term goals. We must all keep our eyes firmly on those goals, even if events cause us to shift and alter short term tactics from time to time.
The key recommendations of the Strategic Plan are as follows:
1. RBA will increase its fleet size from 10 aircraft in 2003 to 18 aircraft by the year 2013. The fleet make up will change from 8 Boeing 767-300 and 2 Boeing 757-200 aircraft in 2003, to 12 new narrow-bodied aircraft and 6 new wide-bodied aircraft by 2013. Half of the new fleet will be leased, and half will be purchased.
2. RBA will inaugurate new services to Auckland, Tokyo, Seoul, Sydney, and Ho Chi Minh City between 2003 and 2005, subject to the successful negotiation of traffic rights by the Ministry of Communications. It will increase the frequency of its services on existing regional routes, defined as flights within 4 hours of Brunei, using smaller narrow-bodied aircraft. It will also seek to increase its frequencies to Jeddah in order to increase carriage of both religious and labour traffic to Saudi Arabia. Other routes, both regional and intercontinental, will continue to be examined for possible addition to the network in the future. This includes points within the BIMP-EAGA region.
3. RBA will commence non-stop flights between Frankfurt and Bangkok, and between London and Brunei in 2003 and 2004 respectively, in recognition on the one hand of the expansion of Middle Eastern carriers and the consequent growth in competition on Middle Eastern routes, and on the other hand of the increasing potential of Asia/Australia to Europe traffic given the strategic location of RBA's hub.
4. RBA will upgrade the quality of its premium product by installing a Super Business (flatbed) Class in all of its wide-bodied aircraft by mid 2004 in place of its existing first and business classes, and by building a world class Premium Lounge at its Brunei hub by late 2003. It will improve its overall product quality by installing personal in-seat multi-channel televisions in Business Class in both narrow and wide-bodied aircraft, and in Economy Class in its wide-bodied aircraft, by mid 2004. It will introduce a wider choice of meals in business class. It will introduce a frequent flyer program in May 2003.
5. RBA will respond to and compete with the growing threat from low cost airlines in the region by cutting back (although not eliminating) inflight service and numbers of cabin crew in the economy class of its narrow-bodied aircraft (to be deployed on regional routes). It will install a denser economy class on narrow-bodied aircraft. It will introduce an aggressive program of direct and internet-based air fares on certain regional routes, and offer ticketless travel where possible, by late 2003.
6. RBA will save distribution costs by widening its travel agency distribution, and tightening its passenger and cargo GSA agreements at online stations. We will increase revenues by establishing a network of sales agents in large markets, such as the USA/Canada, France, Italy, Scandinavia, Eastern Europe, where currently the airline has no presence.
7. RBA will maximise connecting traffic by introducing a redesigned hub and spoke schedule system, to be launched in October 2003, and increase its marketing reach via tactical alliances and code shares on key routes with other airlines.
8. RBA will relaunch its brand image with a new advertising and promotional campaign designed to promote the airline's revised network and enhanced product, within the context of Brunei, the airline's home, as "The Abode of Peace". This positioning is considered both attractive and appropriate.
9. RBA will concentrate on its core business of flying, and therefore will spin off ancillary services such as Maintenance and Engineering and the provision of inbound tours. Spinning off Maintenance will enable the department to transform itself into a stand-alone business, possibly with other partners, and grow its customer base and employment opportunities. With regard to Golden Touch Holidays, we will re-deploy staff and concentrate efforts on aggressive marketing of inbound tours, as opposed to tour fulfillment.
10. RBA will introduce a Voluntary Retirement Scheme. The proposed scheme will give the opportunity for such staff to leave the company, voluntarily, and with incentives. This will have a two-fold effect of reducing long-term cost and providing promotional opportunities.
11. RBA will give bonus awards and salary increments exclusively on the basis of total performance of the company against budget, and individual achievement based on the new Performance Management System. The advantage for both staff and the company is that this will make possible significantly higher awards than in the past, in the event of high company and personal achievement.
12. RBA will require each staff member to attend non-technical training at least once every two years. Senior Managers, Managers and Supervisors will undergo leadership, change management, performance management and supervisory skills training, and junior staff will be required to undergo service delivery skills training. A graduate General Management Trainee program will be established to recruit and train, both internally and externally, high calibre local graduates who will be expected to provide the backbone of the airline's senior management in the years to come. Through these efforts, we will strive to develop a management and staff team that is recognised as professional and motivated, committed to delivering excellent service, and respected for its integrity and honesty. I should also add that we expect managers to work quickly, with a sense of urgency, commitment, and close attention to detail.
13. RBA will invest B$ 56.8 million in 2003/4, as follows:
-B$9.1 million on new seats and interiors in the 4 remaining Boeing 767-300 aircraft
-B$15.1 million on a new inflight entertainment system
-B$10.91 million on upgrading 3 of the remaining 4 767-300 aircraft to maximum take-off weight and thrust capability
-B$0.2 million on a new internet booking engine
-B$0.7 million on non-technical training
-B$4.4 million (estimated) on the Voluntary Retirement Scheme.
-B$5 million on a new lounges and ground equipment.
-B$10.2 million on Airbus introductory tools and equipment
-B$1.2 million on Airbus technical training
For the years 2004 to 2008, RBA will invest B$324 million in the purchase of new narrow-bodied aircraft.
For the years 2008 to 2013, RBA will invest B$730 million in the purchase of new wide-bodied aircraft and new narrow-bodied aircraft, to replace the remaining 767-300 aircraft and to bring the total fleet size to 18 aircraft, 6 wide-bodied and 12 narrow-bodied, of which half will be owned and half will be leased.
14. RBA plans to invest a total of B$1.12 billion over the 10 year period. This will be made primarily from a combination of cash generated from operations and lease or sale of old aircraft, and will be supplemented by commercial debt and equity. The equity injection is subject to finalisation by the Board and shareholders. The financing arrangements will be structured to ensure that RBA never exceeds a debt to equity ratio of 0.8, in line with "best practice" airline industry standards.
15. RBA expects to make a loss in the "base year" of 2003/4 and a smaller loss in 2004/5. We expect to make steadily increasing profits in 2005/6, 2006/7, and 2007/8. We expect to be cash neutral in 2003/4 and cash positive each year thereafter. The expectations are based on an average Passenger Load Factor over the period of 65%, and an average passenger yield increase of 2% per year based on an improved passenger mix. These are intentionally very conservative estimates with considerable upside potential.
16. RBA believes that by successfully executing its strategic plan, we will reinforce our position as a medium-sized hub and spoke Asian carrier with a strong intra-Asian regional base complemented by a small but focussed intercontinental network, an excellent safety and security record, excellent ground and inflight service, a competitive cost structure, and value for money air fares. By so doing, the airline will provide solid financial returns for its shareholders, contribute significantly to increased tourist revenues, provide long term sustainable employment opportunities, and present itself around the world in a manner in which the nation of which it is the flag carrier can feel justly proud.
The completion of the plan, whilst representative of a lot of hard work, is only the beginning. As the Chairman stated earlier, plans, however good, are no use without successful implementation. That is the challenge which now faces us. We must always remind ourselves that we are a business, operating in a dynamic and volatile international market - a market that will not wait for us if we are slow or indecisive. During the course of the last 8 months, I have had the chance to meet and talk with many of you. I have sought your opinions, and you have always freely and frankly discussed your views and your concerns with me. I am grateful for your honesty and openness, and I have no doubt that in spite of the very serious difficulties and frustrations which we face today, we have the right people, the right skills, the right attitudes, and the right fighting spirit, to achieve what we have set out to do. So let us step forward with courage and optimism, recognise our responsibilities to our shareholder, His Majesty's Government, our colleagues, our customers, ourselves, and get on with the task in hand.
Thank you.
So:
- A ffp by next month! :confused:
- A fleet of 18 aircraft by 2013, 12 new narrow-bodied aircraft and 6 new wide-bodied aircraft.
- By mid 2004 there will be a Super Business (flatbed) Class which I guess there will be no first class anymore
- PTV's in economy in its wide-bodied aircraft by mid 2004
Well they were the points that "I" found major, I cant wait for my favourite airline to be close to an industry leader! hehehe :ok:
It might also give me some more reasoning into why I like the airline hehehe :cool:
What do all of you think about this?
Thanks GOH
PS: Sorry I had to shorten down the post so some of the first few paragraphs are missing from his speech.
I just wanted ot share this with you, well the people that havnt read it already! :p
The following is from Royal Brunei Airlines(http://www.bruneiair.com/news/290403(2).html)
29th April 2003
Speech by RBA CEO, Peter Foster, at the RBA Gala Awards and Strategic Plan Launch Night, 25 April 2003
Therefore in order to achieve sustainable growth, the Board directed the management to put together a road map, to plan the future in as coherent and as detailed a way as possible.
Following this directive, management spent the period from September 2002 to March 2003 putting together the company's Strategic Plan. Before I discuss the key details of the plan I would like to make two points:
Firstly, this was a genuinely company-wide effort, with many people from all departments involved in the various project teams - 52 RBA managers and staff in all. I would like to thank each and every one of you for your efforts.
Secondly, the plan's financial projections run for 5 years and the fleet plan for 10 years. Now of course, we recognise that things will change during the lifespan of the plan. Unexpected events happen - witness the outbreak of SARS - which can combine and conspire to upset even the best-laid strategies. We know that as time passes, we will need to make alterations, to trim or tighten our sails here and there on account of prevailing conditions. Nevertheless, the overall objectives defined in the plan must remain constant if we are to achieve our long-term goals. We must all keep our eyes firmly on those goals, even if events cause us to shift and alter short term tactics from time to time.
The key recommendations of the Strategic Plan are as follows:
1. RBA will increase its fleet size from 10 aircraft in 2003 to 18 aircraft by the year 2013. The fleet make up will change from 8 Boeing 767-300 and 2 Boeing 757-200 aircraft in 2003, to 12 new narrow-bodied aircraft and 6 new wide-bodied aircraft by 2013. Half of the new fleet will be leased, and half will be purchased.
2. RBA will inaugurate new services to Auckland, Tokyo, Seoul, Sydney, and Ho Chi Minh City between 2003 and 2005, subject to the successful negotiation of traffic rights by the Ministry of Communications. It will increase the frequency of its services on existing regional routes, defined as flights within 4 hours of Brunei, using smaller narrow-bodied aircraft. It will also seek to increase its frequencies to Jeddah in order to increase carriage of both religious and labour traffic to Saudi Arabia. Other routes, both regional and intercontinental, will continue to be examined for possible addition to the network in the future. This includes points within the BIMP-EAGA region.
3. RBA will commence non-stop flights between Frankfurt and Bangkok, and between London and Brunei in 2003 and 2004 respectively, in recognition on the one hand of the expansion of Middle Eastern carriers and the consequent growth in competition on Middle Eastern routes, and on the other hand of the increasing potential of Asia/Australia to Europe traffic given the strategic location of RBA's hub.
4. RBA will upgrade the quality of its premium product by installing a Super Business (flatbed) Class in all of its wide-bodied aircraft by mid 2004 in place of its existing first and business classes, and by building a world class Premium Lounge at its Brunei hub by late 2003. It will improve its overall product quality by installing personal in-seat multi-channel televisions in Business Class in both narrow and wide-bodied aircraft, and in Economy Class in its wide-bodied aircraft, by mid 2004. It will introduce a wider choice of meals in business class. It will introduce a frequent flyer program in May 2003.
5. RBA will respond to and compete with the growing threat from low cost airlines in the region by cutting back (although not eliminating) inflight service and numbers of cabin crew in the economy class of its narrow-bodied aircraft (to be deployed on regional routes). It will install a denser economy class on narrow-bodied aircraft. It will introduce an aggressive program of direct and internet-based air fares on certain regional routes, and offer ticketless travel where possible, by late 2003.
6. RBA will save distribution costs by widening its travel agency distribution, and tightening its passenger and cargo GSA agreements at online stations. We will increase revenues by establishing a network of sales agents in large markets, such as the USA/Canada, France, Italy, Scandinavia, Eastern Europe, where currently the airline has no presence.
7. RBA will maximise connecting traffic by introducing a redesigned hub and spoke schedule system, to be launched in October 2003, and increase its marketing reach via tactical alliances and code shares on key routes with other airlines.
8. RBA will relaunch its brand image with a new advertising and promotional campaign designed to promote the airline's revised network and enhanced product, within the context of Brunei, the airline's home, as "The Abode of Peace". This positioning is considered both attractive and appropriate.
9. RBA will concentrate on its core business of flying, and therefore will spin off ancillary services such as Maintenance and Engineering and the provision of inbound tours. Spinning off Maintenance will enable the department to transform itself into a stand-alone business, possibly with other partners, and grow its customer base and employment opportunities. With regard to Golden Touch Holidays, we will re-deploy staff and concentrate efforts on aggressive marketing of inbound tours, as opposed to tour fulfillment.
10. RBA will introduce a Voluntary Retirement Scheme. The proposed scheme will give the opportunity for such staff to leave the company, voluntarily, and with incentives. This will have a two-fold effect of reducing long-term cost and providing promotional opportunities.
11. RBA will give bonus awards and salary increments exclusively on the basis of total performance of the company against budget, and individual achievement based on the new Performance Management System. The advantage for both staff and the company is that this will make possible significantly higher awards than in the past, in the event of high company and personal achievement.
12. RBA will require each staff member to attend non-technical training at least once every two years. Senior Managers, Managers and Supervisors will undergo leadership, change management, performance management and supervisory skills training, and junior staff will be required to undergo service delivery skills training. A graduate General Management Trainee program will be established to recruit and train, both internally and externally, high calibre local graduates who will be expected to provide the backbone of the airline's senior management in the years to come. Through these efforts, we will strive to develop a management and staff team that is recognised as professional and motivated, committed to delivering excellent service, and respected for its integrity and honesty. I should also add that we expect managers to work quickly, with a sense of urgency, commitment, and close attention to detail.
13. RBA will invest B$ 56.8 million in 2003/4, as follows:
-B$9.1 million on new seats and interiors in the 4 remaining Boeing 767-300 aircraft
-B$15.1 million on a new inflight entertainment system
-B$10.91 million on upgrading 3 of the remaining 4 767-300 aircraft to maximum take-off weight and thrust capability
-B$0.2 million on a new internet booking engine
-B$0.7 million on non-technical training
-B$4.4 million (estimated) on the Voluntary Retirement Scheme.
-B$5 million on a new lounges and ground equipment.
-B$10.2 million on Airbus introductory tools and equipment
-B$1.2 million on Airbus technical training
For the years 2004 to 2008, RBA will invest B$324 million in the purchase of new narrow-bodied aircraft.
For the years 2008 to 2013, RBA will invest B$730 million in the purchase of new wide-bodied aircraft and new narrow-bodied aircraft, to replace the remaining 767-300 aircraft and to bring the total fleet size to 18 aircraft, 6 wide-bodied and 12 narrow-bodied, of which half will be owned and half will be leased.
14. RBA plans to invest a total of B$1.12 billion over the 10 year period. This will be made primarily from a combination of cash generated from operations and lease or sale of old aircraft, and will be supplemented by commercial debt and equity. The equity injection is subject to finalisation by the Board and shareholders. The financing arrangements will be structured to ensure that RBA never exceeds a debt to equity ratio of 0.8, in line with "best practice" airline industry standards.
15. RBA expects to make a loss in the "base year" of 2003/4 and a smaller loss in 2004/5. We expect to make steadily increasing profits in 2005/6, 2006/7, and 2007/8. We expect to be cash neutral in 2003/4 and cash positive each year thereafter. The expectations are based on an average Passenger Load Factor over the period of 65%, and an average passenger yield increase of 2% per year based on an improved passenger mix. These are intentionally very conservative estimates with considerable upside potential.
16. RBA believes that by successfully executing its strategic plan, we will reinforce our position as a medium-sized hub and spoke Asian carrier with a strong intra-Asian regional base complemented by a small but focussed intercontinental network, an excellent safety and security record, excellent ground and inflight service, a competitive cost structure, and value for money air fares. By so doing, the airline will provide solid financial returns for its shareholders, contribute significantly to increased tourist revenues, provide long term sustainable employment opportunities, and present itself around the world in a manner in which the nation of which it is the flag carrier can feel justly proud.
The completion of the plan, whilst representative of a lot of hard work, is only the beginning. As the Chairman stated earlier, plans, however good, are no use without successful implementation. That is the challenge which now faces us. We must always remind ourselves that we are a business, operating in a dynamic and volatile international market - a market that will not wait for us if we are slow or indecisive. During the course of the last 8 months, I have had the chance to meet and talk with many of you. I have sought your opinions, and you have always freely and frankly discussed your views and your concerns with me. I am grateful for your honesty and openness, and I have no doubt that in spite of the very serious difficulties and frustrations which we face today, we have the right people, the right skills, the right attitudes, and the right fighting spirit, to achieve what we have set out to do. So let us step forward with courage and optimism, recognise our responsibilities to our shareholder, His Majesty's Government, our colleagues, our customers, ourselves, and get on with the task in hand.
Thank you.
So:
- A ffp by next month! :confused:
- A fleet of 18 aircraft by 2013, 12 new narrow-bodied aircraft and 6 new wide-bodied aircraft.
- By mid 2004 there will be a Super Business (flatbed) Class which I guess there will be no first class anymore
- PTV's in economy in its wide-bodied aircraft by mid 2004
Well they were the points that "I" found major, I cant wait for my favourite airline to be close to an industry leader! hehehe :ok:
It might also give me some more reasoning into why I like the airline hehehe :cool:
What do all of you think about this?
Thanks GOH
PS: Sorry I had to shorten down the post so some of the first few paragraphs are missing from his speech.