Royal Brunei Airlines has for the first time admitted financial difficulties and has acted by laying off foreign managers, freezing salaries and making other internal cuts.
The carrier, which for years has lost money although traditionally immune from government-ordered cuts, laid off 44 managers late in March, many of them foreign employees. Those cuts came after the lay-off of six senior managers earlier in the month. Assistant departmental director posts have been eliminated and 25 local managers have been promoted, the airline says. Salaries are not being reduced, but there will be no pay rises for the majority of employees this year. Most overtime work has also been frozen while some allowances are being revoked.
The airline has been in financial difficulty for years, but now it will have to operate more as a commercial business, with no more state handouts, senior government officials say. They have also warned that more cuts may be in store if Royal Brunei's financial position does not dramatically improve.
The airline is said to have lost $36 million Brunei dollars ($19.5 million) last year. But the government says the cost-cutting measures should help turn in a marginal profit this year. The carrier claims losses were reduced last year from the previous year's B$100 million.
Source: Airline Business