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Introduction

Welcome to WAC RBA Case Competition! First and foremost, thank you for taking the time to join us for this business challenge. When you leave the competition, you will walk out

with not just a sense of achievement, but also valuable, practical and real experiences working in consultancy and advisory roles.

Royal Brunei Airline UK representatives will be here in the hopes of seeing the brightest solutions to their current business challenge. Do not hesitate to bring the best of your ability

to showcase your problem-solving skills and analytical minds.

Business Challenge

How can RBA encourage ASEAN students in the UK to fly with them to RBA's key destinations* in SEA?

Note Each team will be given 30 minutes on the day to prepare for the presentation and 10

minutes to present their solution to the judges in the first round. The winning teams in the final round will have 5 minutes each to pitch their solutions to the panel judges.

*Further rules are detailed in pg.3.

Panel Judges Mr. Adiel Mambara (Country Manager UK)

Mrs. Aurora Kataroshi (Key Account Manager) Mr. Wayne Newton (Key Account Manager)

Mr. Naseem Parkar (Customer Service Officer)

Prize First Prize: £100 Love2shop voucher

Second Prize: £50 Love2shop voucher Third Prize: Two Airport lounge passes in Brunei Airport

Fourth prize: £25 Love2shop voucher Fifth Prize: One Royal Brunei Airlines goody bag

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Timeline

Time MB0.07 MS.02

12:30 – 1:00 Registration (outside MB0.07)

1:05 – 1:15 Welcome address by RBA

1:15 – 1:20 Recap of Case Competition Rules

1:20 – 1:50 Preparation time

1:50 – 1:55 Teams (6 to 11) to move to MS.02

1:55 – 2:00 Draw lots to decide the order of presentations

2:00 – 2:10 Team 1 Team 6

2:10 – 2:20 Team 2 Team 7

2:20 – 2:30 Team 3 Team 8

2:30 – 2:40 Team 4 Team 9

2:40 – 2:50 Team 5 Team 10

2:50 – 3:10 Break Respective teams return to MB0.07

3:10 – 3:30 Final round between the top two teams

3:30 – 3:45 Break and WAC 2020 Presentation

3:45 – 4:00 Prize Presentation and Networking

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Rules

1. All information enclosed in this booklet are the confidential property of Royal Brunei Airlines and cannot be distributed, replicated or referenced outside the premise of your team and the competition.

2. The information presents in these case materials has been compiled by the WAC Corporate Relations team in a way that, to the greatest extent, replicates typical reference materials one may face working as a consultant in collaboration with professionals in the field. However, WAC does not claim to promise that this exactly reflects the nature of consultancy work.

3. After the break, two teams will be selected to compete against each other in the final round. All judgement criteria and decisions are based on the opinions of the RBA panel judges and are in no part, reflective of the opinions held by WAC.

4. Competitors may opt to reference any other publicly available resources; however, they may be advised to stay within the scope of the case material.

5. Competitors may not ask for external help outside the premise of the team. Team members’ network with other sources (that may or may not include RBA employees, Warwick Academics or WAC committee members) are also not included in this premise.

6. No discussion with or any form of collaboration with any other teams is allowed. Any form of communication found between the teams involved from the time of registration for the event by WAC members will result in immediate disqualification.

7. No teams can exceed the allocated timeframe for their presentation and prior preparation. Immediate disqualification would also follow.

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RBA CASE STUDY MATERIALS

1. RBA Overview

1.1. Who are we?

Royal Brunei Airlines Sdn Bhd is the national flag carrier airline of Brunei Darussalam. In our first year, services were started to Singapore, Hong Kong, Kota Kinabalu and Kuching in Malaysia. RBA’s Key Destinations in Asia includes mainly Kuala Lumpur, Vietnam, Singapore, Saigon, Manila and Jakarta. Having opened its first daily non-stop direct flights between London Heathrow and Brunei International Airport since 28/010/2018; RBA wishes to increase its presence among student societies in the UK and the ASEAN student market in general. The RB Brand A recent branding exercise to convey RB’s core values and DNA for a more engaging experience with James Millett, RB Senior Vice President Digital and Marketing, and Tanuj Philip, Founding Partner and CEO of M&C Saatchi - to understand the RB Brand transformation process and what it aims to achieve. What makes a brand memorable is that it speaks to its audience and makes a lasting impression with what it is intending to deliver as well as represent. Very few brands do a good job at making this impression, but the result of good branding is priceless - your audience remembers you and stays loyal while potential ones are eager to try you out. RBA underwent a recent exercise to enhance its existing brand DNA as part of its effort to connect with current and future guests as well as with the global community as a whole. The two spearheads of the campaign share details of the RBA concept. First, the buzz about Royal Brunei (RB) as a "world-class boutique airline". What will this mean for RB's guests, travellers, partners and Brunei? Staying world class does not mean standing still, we have to keep a wealth of projects and initiatives to ensure we keep on improving our service and guest experience. In addition, the boutique position of our brand recognises we are a small airline competing in a big market. To do this effectively we need to stand out from the crowd. I believe our personalised, warm and characteristic Bruneian hospitality is a key part of this. We want everyone involved in our brand to experience a unique, tailored experience that exceeds expectations.

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What are some of the key challenges RBA faces as a brand With 14 aircrafts and the youngest fleets in the world, relatively speaking we are a small airline. One of our main challenges internationally is for guests to fly with us for the first time. Particularly if they are not based in Brunei or have not yet discovered the amazing country of Borneo island as a whole. Once they do, we hope our warm personality will win them over and keep them coming back. Even when we invest more in marketing, it is relatively modest compared to some of the bigger players. We have a great team in HQ and across our markets, thinking differently and working hard to get this message out there. The more business partners and guests that help us to do this, the stronger the brand will become. How do you plan to roll out the new branding? We have two key videos assets that bring the concept to life, one that tells the story of "the little things that make our service special" and one that goes deeper into who Royal Brunei is and what we stand for. We will amplify these through a TV sponsorship deal, digital media, our own digital channels and also have billboards and press advertising in key markets. What do you hope to achieve with this campaign? We want more people to realise what with Royal Brunei, they have a refreshingly different boutique option without having to choose between full-service airlines that cost the earth or low-cost carriers were making compromises is a given. We want them to experience for themselves the world-class service that we offer, and the convenience of reaching a host of destinations either direct or through convenient transit via Brunei. Ultimately, we want this campaign to drive business results for Royal Brunei and customer delight among our guests.

1.2. What is the airline’s vision for the next five years?

○ NETWORK:

i. Develop new markets at significantly lower risks than otherwise possible by

working with other airlines. This also allows us to test the markets for future

opportunities.

○ FLEET:

i. Fleet upgrade to help Royal Brunei Airlines to continue to improve the

schedule reliability, improve products and lower costs.

○ PEOPLE:

i. In addition to the technical skills training already offered, Royal Brunei Airlines

is embarking on programs to bridge the gap for non-technical skills such as

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leadership. The objective is to ensure each staff member has been trained and

has the required skills for their level of work

○ PROJECTS:

i. We will continue strategic human resource development programs for cadet

pilots, engineering apprentices, graduate trainees and CEP. The cadet pilot

scheme will be fully managed in-house.

○ BUSINESS UNIT PERFORMANCE:

i. Royal Brunei Airlines is undertaking detailed reviews of the various areas of

the business with the objective to introduce best practices, improve processes,

develop people and achieve industry benchmarks in business unit

performance. The review for the engineering department was completed

recently and the recommendations are being implemented.

○ COMPANY PERFORMANCE:

i. Improve revenue performance and profit

ii. Develop new revenue streams

iii. Continue improving on-time performance

1.3. Key destinations and partners

○ From London Heathrow in the UK, Royal Brunei Airlines operates routes via Brunei to

over 30 global destinations including the Philippines (Manila), Indonesia (including

Bali, Jakarta and Surabaya), and Australia (Melbourne and Brisbane).

○ At present Royal Brunei Airlines has codeshares with the following airline partners:

China Airlines, China Eastern Airlines, Garuda Indonesia, Hong Kong Airlines, KLM

Royal Dutch Airlines, Korean Air, Malaysia Airlines, Myanmar Airways International,

Philippine Airlines, Thai Airways, Turkish Airlines

1.4. What does the ‘typical’ RB passenger profile look like? Which customers in the UK are you targeting?

○ Typically, our passengers are leisure travellers visiting friends and family. However,

we also have a lot of backpackers and students travelling with us. Females aged

between 25-37 are our most prolific travellers. Going forward we are keen to maintain

this but also to grow the number of passengers travelling for business.

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1.5. Key Competitors

1.5.1 How do you differ from other airlines?

○ We pride ourselves on our high levels of service and quality and this is reflected in customer feedback

○ Secondly, Royal Brunei Airlines fly’s aircraft with an average age of 2.5 years, making it the youngest fleet in the industry

○ For passengers travelling to Melbourne and Brisbane in Australia, our route via Brunei is the fastest route from the UK to both cities.

1.6. Product and Services

1.6.1. Loyalty Programme

What is your frequent flyer programme called, how many people are registered (globally and based in the UK), and what are the most popular redemptions?

○ Royal Skies is the frequent flyer programme of Royal Brunei Airways. Anyone

aged two years, or more is eligible to join and will receive Royal Skies miles

each time they fly or spend with our participating partners. The programme

is split into three tiers: Blue, Silver and Gold, each with unique benefits.

Royal Brunei Airlines, three-tiered loyalty programme offers members a variety of savings and incentives:

China Airlines Ltd.5665.52

AirAsia Group Berhad2637.22

Singapore Airlines Ltd12101.12

Competitors Revenue (million US$)

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1. Royal Skies Blue - is the entry-level tier which offers 1000 welcome

bonus miles when customers enrol. Other benefits include miles

added for travelling with Royal Brunei Airlines and at participating

Royal Skies partners, an opportunity to book rewards with Royal Skies

Miles, special members-only offers and a discounted entry rate at

Brunei International Airport’s Sky Lounge.

2. Royal Skies Silver - Blue passengers will automatically be upgraded to

Silver after earning 25,000 flight miles or flying 20 eligible sectors on

a year. Silver benefits include 5,000 Welcome Bonus miles on joining,

50% Tier Bonus on all eligible flights, complimentary preferred seating

upon check-in (subject to availability), 10kg extra baggage allowance,

complimentary Sky Lounge Access at Brunei International Airport and

priority check-in for all flights.

3. Royal Skies Elite Gold - is the top-class tier of the loyalty programme.

To qualify passengers must earn 50,000 flight miles or fly 40 eligible

sectors in one qualifying year. The remaining benefits are: 10,000

Welcome Bonus miles, 100% Tier Bonus on all eligible flights, non-

expiry of miles as long as Elite Gold tier is maintained, priority

boarding at gate, priority baggage handling, complimentary

preferred seating upon reservation lead passenger plus one guest,

complimentary 20kgs extra baggage allowance, complimentary

Business Class lounge access lead passenger plus one guest (where

available within the RB network), priority check-in for all flights and

priority award redemption

What are the specifics of your onboard offerings - including F&B, entertainment and luggage allowance?

○ The airline offers a fully catered Halal dining service for passengers, with a

focus towards healthy, balanced meals. Royal Brunei Airlines is a dry airline

and no alcohol is served or available for purchase.

○ The airline offers a generous hold baggage allowance for an economy which

starts from 20kg up to 30kg and 40kg for business passengers. Cabin baggage

must be able to fit within the overhead lockers or under seats and not exceed

7kgs in economy. In business class, passengers are permitted two carry-on

items with a maximum weight of 12kgs. Furthermore, standard sports

equipment such as surfboards, cricket equipment and golf clubs are carried as

part of the baggage allowance, provided they are within the set weight limits

as outlined.

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○ In economy, all seats aboard a Boeing 787 feature an Eco-9-inch personal

touch screen monitor which can connect to the on-board entertainment

system, while the Airbus 320 features a 10.1-inch screen. Seats on all jets also

come with a USB connector and shared power supply. Royal Brunei Airlines

IMPIAN Entertainment System brings blockbuster movies, TV shows and music

directly to every passenger. Business-class offers larger screens ranging from

11.6 - 15.4 inches

2. Market Environment

2.1. Aviation market climate

Source: Statista

2.2. Prospects

3.2.1 Passenger Demand to Double Over 20 Years but increased trade protectionism has potential to damage growth prospects, IATA, 18th October 2016

The International Air Transport Association (IATA) expects 7.2 billion passengers to travel in 2035, a near doubling of the 3.8 billion air travellers in 2016.

Source:

446.76

373.2

337.14

198.16

148.17

67.91

41.73

20.38

Thailand

Singapore

Malaysia

Indonesia

Phillipines

Cambodia

Myanmar

Brunei

Traffic in thousands

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The prediction is based on a 3.7% annual Compound Average Growth Rate (CAGR), 20-Year Air Passenger Forecast.

“People want to fly. Demand for air travel over the next two decades is set to double. Enabling people and nations to trade, explore, and share the benefits of innovation and economic prosperity makes our world a better place,” said Alexandre de Juniac, IATA’s Director General and CEO.

Eastward shift, developing market focus

The forecast for passenger growth confirms that the biggest driver of demand will be the Asia-Pacific region. It is expected to be the source of more than half the new passengers over the next 20 years. China will displace the US as the world’s largest aviation market (defined by traffic to, from and within the country) around 2024*.

India will displace the UK for third place in 2025*, while Indonesia enters the top ten at the expense of Italy. Growth will also increasingly be driven within developing markets. Over the past decade, the developing world’s share of total passenger traffic has risen from 24% to nearly 40%, and this trend is set to continue.

Key facts (all figures based on central growth forecast)

Fast-growing markets

Three of the five fastest-growing markets in terms of additional passengers per year over the forecast period will be

China (1st) (817 million new passengers for a total of 1.3 billion)

Indonesia (4th) (135 million new passengers for a total of 242 million)

Vietnam (5th) (112 million new passengers for a total of 150 million).

Regional growth

Routes to, from and within Asia-Pacific will see an extra 1.8 billion annual passengers by 2035, for an overall market size of 3.1 billion. Its annual average growth rate of 4.7% will be the second highest, behind the Middle East

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Europe will have the slowest growth rate, 2.5%, but will still add an additional 570 million passengers a year. The total market will be 1.5 billion passengers

Indonesia, Thailand, Vietnam, Malaysia and the Philippines are now experiencing faster international than domestic growth.

Risks, Challenges and Opportunities

The 20-year forecast puts forward three scenarios. The central scenario foresees a doubling of passengers with a 3.7% annual CAGR. If trade liberalization gathers pace, demand could triple the 2015 level. Conversely, if the current trend towards trade protectionism gathers strength, growth could cool to 2.5% annual CAGR which would see passenger numbers reach 5.8 billion by 2035.

“Economic growth is the only durable solution for the world’s current economic woes. Yet we see governments raising barriers to trade rather than making it easier. If this continues in the long-term, it will mean slower growth and the world will be poorer for it. For aviation, the protectionist scenario could see growth slowing to as low as 2.5% annually. Not only will that mean fewer new aviation jobs, but it will also mean that instead of 7.2 billion travellers in 2035, we will have 5.8 billion. The economic impact of that will be broad and hard-felt,” said de Juniac.

A similar scenario has emerged in other markets across Southeast Asia. Airlines competed very aggressively on price in the first three quarters of 2018 despite the increase in fuel prices. The price sensitivity of the Southeast Asian passenger is a factor and it makes it hard to pass on any rise in fuel costs, but some airlines have been desperate to generate cash.

Whatever scenario is eventually realized, growth will put pressure on infrastructure that is already struggling to cope with demand. “Runways, terminals, security and baggage systems, air traffic control, and a whole raft of other elements need to be expanded to be ready for the growing number of flyers. It cannot be done by the industry alone. Planning for change requires governments, communities and the industry working together in partnership,” said de Juniac.

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3. Recent trends in the ASEAN airlines industry 3.1. Response by Karam Chand, RBA Chief Executive Officer on 07/11/2019

“Price is not everything. The product features, reliability, service delivery is highly sought in the Asia Pacific. We are focused on offering a consistent product and

service across both single-aisle and wide-body aircraft. Service, service, service is our mantra.”

Which aspects of the air travel journey are most important to your passengers?

In-flight connectivity is very important. The choice and experience matter given the disruption caused by Netflix, for example, because guests expect similar experiences on board. In-flight connectivity is becoming important, too. However, the business case remains elusive for most airlines. If you ask guests if they will pay for connectivity, the projected and actual uptake seen elsewhere is low. The uptake on free of charge connectivity is below 40 per cent from the research we have seen. So, this makes for a very interesting dilemma for airline CEOs.

Which trends outside of the airline industry do you have your eye on and why?

Airlines are legacy businesses with lots of legacy processes and systems. The world has shown us how technology can be smartly used across all parts of the business from electric flight bags, portable engineering solutions, check-in using mobile devices and more recently, biometrics. Deep guest engagement and quick resolution of guest issues require new solutions. We have just established a 24/7 guest care team in our operations control centre. This is an expensive initiative but the right one given the 24/7 cycle of social media.

Has social media changed the way airlines and their customers communicate?

It certainly has. There’s the speed, transparency, the emotional part (both positive and negative) and perhaps greater expectations from the guests – some of which is unrealistic. For example, if there are technical issues with the national Internet provider, people are more understanding. However, if there is a mechanical defect on an aircraft, guests expect to be put onto another aircraft or airline within a very short time.

3.2 Other international trends

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3.2.1. Blockchain

According to SITA’s 2018 Air Transport IT Insights, 34% of airports are planning blockchain research and development programmes by 2021. One area in which airports see blockchain’s potential is the ability to help improve passenger identification processes, in part by reducing the need for multiple ID checks.

Last year, Singapore Airlines Group’s frequent flyer programme, KrisFlyer, launched KrisPay, which it claims to be “the world’s first blockchain-based airline loyalty digital wallet”

3.2.2 Commercial partnerships

Last year, Dubai International Airport became the first airport to partner with Deliveroo. The unique concept – named DeliverooDXB – which was trialled at the airport, enabled passengers to get freshly-prepared food delivered straight to their boarding gates within minutes of ordering. It could potentially help the airport overcome the fact that space for additional catering outlets is limited.

There is also some speculation that the recently introduced Amazon Go concept could soon appear at airports. Indeed, Amazon Go’s slogan “No Lines, No Checkout” would seem to be an ideal fit for the airport environment.

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Case Written by WAC Corporate Relations Team, Hailee Nguyen, Chantelle Wong, Darrin Hansakul, Abhay Anam and Jin Shien Tan