The announcement of a new Brunei-based airline on September 15 at the 20th China-ASEAN Expo (CAEXPO) wasn’t just the talk of the town back in the Sultanate, but also marked a significant milestone for China’s aviation industry.
GallopAir’s US$2 billion order for 30 aircraft from the Commercial Aircraft Corporation of China (COMAC) crossed off many firsts for the Chinese state-owned aerospace manufacturer. It’s their biggest international order and marks the first overseas purchase of their highly publicised narrow-body C919 jet.
From becoming Brunei’s second airline, positioning the Sultanate as a regional travel hub, to the potential establishment of COMAC’s Southeast Asian operations in Brunei, there’s much at stake if GallopAir can successfully execute its ambitious plan to commence operations as a low-cost carrier (LCC) in the third quarter of 2024.
However, the backstory behind GallopAir, owned by Chinese businessman Yang Qiang, remains relatively unknown.
In an exclusive interview, we sat down with their CEO, Cham Chi, to delve into why they chose Brunei, the status of their Air Operator Certificate (AOC) approval, and their seven-year operational plan to connect the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP-EAGA) with China.
Aligning Belt and Road, Vision 2035, and BIMP-EAGA
China has become an increasingly important economic partner for Brunei in the past decade. Bilateral trade records new highs annually, crossing the US$3 billion mark in 2022.
China currently accounts for the largest foreign direct investment (FDI) into Brunei – the most prominent being Hengyi Industries‘ oil refinery and petrochemical plant, that’s now committing another US$9 billion to develop its second phase.
Chinese engagement also extends to Brunei’s logistics and travel sector.
Since 2018, Brunei’s main port in Muara has been operated by Muara Port Company, another Brunei-China joint venture between the government’s Darussalam Assets and Beibu Gulf Holding. Prior to the pandemic, China also accounted for the largest tourist arrivals into Brunei.
In 2019, the leaders of both countries met, pledging greater cooperation and affirming the alignment of their nation’s cornerstone policies: Brunei’s national vision Wawasan 2035, which calls for economic diversification, and China’s Belt and Road Initiative, an extensive infrastructure and economic development project connecting China along two main trade routes.
Cham says the leaders’ meetings and the recent inflow of Chinese FDI have buoyed the sentiment of other Chinese investors looking at Brunei. This led to Yang, owner and chairman of the Shaanxi Tianju Investment Group, mulling Brunei as a base for a Southeast Asian airline startup before the pandemic.
“Our investor Yang is very passionate about the aviation industry. In 2011, he started his first two aviation companies; one is a helicopter company (the first of its kind in northwestern China) and one is a travel agency (which charted 11 international routes between China and ASEAN),” said Cham.
The CEO said Yang narrowed down their options to Singapore and Brunei. Although Singapore has the stature of an international travel hub with one of the best airports in the world, its aviation sector is correspondingly more competitive, making the quieter space of Brunei an ideal starting point.
The Sultanate also has an edge in proximity and intergovernmental relations for the relatively untapped and under-served BIMP-EAGA market, an emerging sub-regional grouping expected to gain more prominence with the relocation of Indonesia’s capital to Nusantara, Kalimantan next year.
“Before COVID-19, we were discussing setting up in ASEAN. These two countries (Singapore and Brunei) have the top GDP-PPP in the region. Also, the regulation, culture, and government; it’s very good for the aviation business. Brunei has only one (airline), so it is our best choice,” said Cham.
In their latest corporate profile, GallopAir says their goal is to establish Brunei as a “pivotal aviation hub for regional passenger consolidation,” especially within BIMP-EAGA, by providing connectivity between cities in China, Southeast Asia, and the Southwest Pacific.
A seven-year plan
The announcement of GallopAir’s 30-aircraft fleet raised eyebrows – expectedly so; it’s double the carriers currently operated by Royal Brunei (RB), though the latter’s fleet is made up of larger models with longer-distance capability. But GallopAir’s rollout will be gradual, taking up to seven years, as they expect to take delivery of three to five aircraft annually.
Cham also said their flight routes will complement, instead of directly competing with the state-owned carrier.
GallopAir’s complementary strategy involves being an LCC, not flying or limiting flights to existing RB destinations, and prioritizing closer destinations which could serve as a feeder for RB’s more international, long-haul flights.
Though GallopAir has publicized their planned flight routes at CAEXPO and more recently at BETCON, both iterations are not finalised.
Planned destinations currently include:
- China: Sanya, Kunming, Nanning, Guilin, Guangzhou, Xiamen, Quanzhou, Chengdu, Chongqing, Changsha, Wuhan, Hangzhou
- Malaysia: East – Miri, Kuching, Kota Kinabalu, Tawau. West – Johor Bahru, Ipoh, Penang, Langkawi
- Indonesia: Samarinda, Balikpapan, Bandung, Surabaya, Bali
- Philippines: Puerto Princesa, Davao, Cebu, Clark International Airport
- Thailand: Phuket, Pattaya, Chiang Mai
- Additionally: Hong Kong; Kaohsiung, Taiwan; Hanoi, Vietnam; Dili, Timor-Leste; and Darwin, Australia.
Cham explained that their gradual servicing of these destinations is tied to the capability of the ARJ21 – a regional jet that they’ll receive first – and then the C919 – a rival to Airbus’s A320 and Boeing’s 737 – which they expect to receive in five years.
GallopAir’s fleet of 30 is split evenly between ARJ21 and C919 models. The ARJ21 has a listed range of up to 3,700km, while the C919 can fly up to 5,555km. Of the ARJ21 ordered, five units are non-baseline passenger variants: three freighters, one business jet, and one medical evacuation plane.
“The map (list of routes) is a long-term plan, around seven years. For our first year (ARJ21), we will have a passenger flight, freighter aircraft, a business jet, and a medical evacuation plane, serving the region for different purpose flights,” he said.
“As we signed at CAEXPO, we want to link Guangxi first through Nanning (capital of the region) and Guilin, which is a very beautiful tourist city. Then Dili, Timor-Leste, as they are very much in need of an outbound provider.”
Nearer destinations in BIMP-EAGA are also being prioritised.
Cham added that they will also be able to connect travel between countries outside Brunei by using the Sultanate as a stopover or transit point.
“For example, passengers from China can fly to Brunei, then onto another destination in BIMP-EAGA. Or, say someone from Indonesia could travel to Brunei then to countries further north like the Philippines or China.”
Tempering the hype: clearing AOC and other regulations
Cham says GallopAir is currently at stage one out of five in their AOC approval process from Brunei’s Department of Civil Aviation.
They expect to enter phase two – formal application – this December. After passing this phase, they will proceed with hiring staff.
Since COMAC aircraft are new to Brunei, they will also separately require type certification from DCA.
Cham is confident that they can meet the requirements to pass the five stages for their AOC as well as have their fleet certified, but says expectations over their launch date may have to be tempered.
“We still want to start commercial flights in Q3 next year, but we need to follow all the government regulations,” noting that the novelty of their entry may extend their own one-year target.
Cham also noted that China has its own regulations for incoming new airlines, which may include having a track record of landing successfully elsewhere, in which case GallopAir’s first destinations will be shifted to BIMP-EAGA.
GallopAir’s cabin crew and ground staff will begin with locals, but Cham said it would be difficult to recruit and train local pilots to operate COMAC aircraft in time for their launch next year. A cadet training pilot scheme will be launched to fulfill longer-term demand.
Their official website featuring a ticket booking platform will also be on hold until approvals are given to be operational.
Cham said that similar to other FDIs in Brunei, GallopAir is keen on seeking investment and shareholding from the Brunei government.
GallopAir Private Limited, a holding company in Singapore, currently owns 95% of GallopAir Sdn Bhd in Brunei. Their Singapore company is wholly owned by Shaanxi Tianju Investment Group in China. There are also several Chinese investors holding minority stakes.
Contingent on their successful setup in Brunei, Cham added that COMAC may consider setting up a base in Brunei to help service GallopAir and fuel their own expansion in the region.
For all the discussion on Brunei’s potential to be a regional travel hub, the numbers have yet to materialise. Though it boasts several direct, long-haul flights – including the UK and the Middle East – in terms of passenger volume, the Brunei International Airport lags behind its Borneo counterparts.
How much of this will GallopAir change?
Yang’s pioneering venture hopes to provide a resounding answer – and if able to do so will etch a new chapter in the growing Brunei-China partnership.
“We are the first company to use China-made aircraft as an initial startup (outside China),” Cham reiterates at the end of the interview.
“So, it’s what people in China and the whole world are waiting to watch.”
