BANDAR SERI BEGAWAN – Royal Brunei (RB) Airlines has inked a billion-dollar financing deal with two local banks to purchase eight new aircraft this year.

In a speech on Tuesday, CEO Karam Chand (pictured above, 2R) said the new fleet will allow the airline to achieve a leaner cost structure from the combination of decreased maintenance costs and fuel consumption.

RB just received the first of seven Airbus A320neo aircraft last Friday, which is part of the flag carrier’s plans to expand its network in east Asia.

“The collaboration is a very significant one indeed for the three iconic Brunei brands, given the magnitude of the transactions with Airbus and Boeing,” Chand said at a signing ceremony at Brunei International Airport, adding that at list price, the eight aircraft are valued in excess of USD$1 billion.

Five of the A320neo aircraft and one B787-8 Dreamliner will be financed through Bank Islam Brunei Darussalam (BIBD) using a syariah-compliant loan structure, while the remaining two A320neos will be financed through Baiduri Bank using conventional financing.

Baiduri CEO Pierre Imhof said the excess liquidity of the local banking sector has allowed financial institutions to underwrite such a large project.

“This, is what I hope, is first of many financing transactions not only between the local banks and government-linked companies but with the larger Bruneian economy,” added second finance minister Dato Seri Paduka Dr Hj Mohd Amin Liew Abdullah.

“Transactions such as these will benefit multiple sectors and industries… [in terms of] job creation and connectivity… New pilots would need to be trained. Cabin crew would need to be hired. Engineers would be given an opportunity to increase and enhance their technical ability.”

Chand said that the financing deal, coupled with the announcement of non-stop daily services to London Heathrow and the arrival of the first A320neo aircraft, made May a very significant month for the airline: “Complete fleet renewal is a rarity in our industry and to achieve this by end of 2018 will be a very significant milestone for RB.”