This article first appeared in The Edge Malaysia Weekly on May 8, 2023 - May 14, 2023

BARELY four months into his new position as CEO of group aviation at Berjaya Land Bhd (BLand), Datuk Captain Chester Voo Chee Soon is off to a flying start as he draws up a business plan to take the airlines in its fold to the next level.

Voo joined BLand in February after 2½ years with the Civil Aviation Authority of Malaysia. He oversees the airlines under the Berjaya group, including Berjaya Air Sdn Bhd and Asia Jet Sdn Bhd.

BLand group CEO Syed Ali Shahul Hameed tells The Edge in an interview: “We want to take Berjaya Air to the next level — both commercially and safety-wise — with the help of Voo, who brings with him his vast experience in the aviation industry. I can see from the day he joined [BLand] until today, which is less than [four] months, there has been a total change in the organisation. Staff are highly motivated.

“The airline operation is a service sector for our hotels and resorts under BLand. In Malaysia, we have hotels and resorts in Tioman, Redang, Langkawi, Penang and Johor. Berjaya Air has been operating charter flights out of Sultan Abdul Aziz Shah Airport (Subang airport) in Subang, Selangor, to these island-based resorts.”

He adds that the airline has a fleet of two turboprops, comprising an ATR 42-500 and the bigger ATR 72-500.

A check on Berjaya Air’s website shows that it also offers charter flights to Johor from airports in Medan, Batam and Jakarta; to Penang from Medan and Jakarta; as well as to Redang from Senai International Airport in Johor, Medan and Seletar Airport in Singapore.

Voo sees an opportunity to grow Berjaya Air’s fleet and network as it capitalises on the demand for more regional connections in the post-Covid-19 environment. He aims to double the airline’s fleet and increase the number of destinations to include nearby islands off Malaysia.

He says: “We are working on a business plan that includes details about the destination network and finances for new aircraft for Berjaya Air. The plan is basically to fly enough routes with enough seat capacity to generate enough revenue to cover our initial capital expenditure (capex).

“When we talk about capex, it has to make sense in terms of how long it will take to deliver a return on investment. Yes, we are looking to grow, but growing through ‘earn and pay’. It is not about putting in a lot of money and trying to recover it over a long period of time.”

Voo says the group is working on acquiring two additional ATRs for Berjaya Air and one private jet for Asia Jet, which provides private jet charters. Both Berjaya Air and Asia Jet hold an air service permit (ASP) to operate non-scheduled, or charter, services.

BLand is in talks with aircraft manufacturers ATR and Bombardier as well as aircraft lessors to purchase the planes. “We haven’t confirmed anything yet, but we are looking to expand our aircraft fleet to cater for current and future demand,” says Voo.

“Whether we ultimately choose to buy or lease, it is more of a business model. It depends on how fast we can get the aircraft and retrofit the cabins to what we want to promote our brand. At the pace that we are working right now, we expect about 12 months before the new aircraft are delivered.”

The last few years have seen a surge in the number of new airlines, including SKS Airways and MYAirline, while established carriers such as Malaysia Airlines, AirAsia, AirAsia X and Firefly are expanding aggressively. Berjaya Air has no intention, however, to compete head-on with scheduled commercial airlines, says Voo.

“There are two keys to making Berjaya Air successful. First, we are not doing what normal airlines do. That means we are not flying the regular scheduled routes. We are not inducting capacity into routes that are already being flown and saturated,” he explains.

“The national passenger load factor with all the aircraft in the country is 75%. If you add more capacity, the average load factor will drop to the 60s. So, it would not be helping anyone. Instead, we are going to operate routes that will serve our resorts and hotels and where we have a purpose-built target customer base.

“With the new ATRs, we are looking to fly anywhere within two hours from Subang airport, which will reach up to southern Thailand. We are not looking at the normal destinations that scheduled commercial airlines fly to, but niche routes where we have dedicated tourists because at the moment we are a non-scheduled carrier. We want to build a lot of charter flights that can tie up with our resorts and hotel operations so they complement each other.

“Second, we want to be premium and exclusive. Our products will be of high value and high quality.”

Syed Ali notes that the airline is taking steps to raise its service standards for its resorts by converting the two existing ATRs into a business class configuration. “Our move towards the ultra luxury market is in line with the group’s main focus on ultra luxury brands such as Four Seasons Hotel. We don’t want the volume, but to serve a niche market,” he says.

Voo points out that Berjaya Air will be one of the region’s first few airlines to fly all-business-class seats. “We want to focus on passenger comfort, client experience, and we are going to synergise and harmonise with Berjaya Group,” he says.

With two more ATRs set to join the Berjaya Air fleet, the airline is already eyeing five or six potential new routes within two to 2½ hours from Subang airport. Voo says it is looking at possibly adding Penang, Langkawi and three to four island resorts in Thailand, such as Koh Samui, to its route network. “There is a Four Seasons Resort in Koh Samui and there is currently no Malaysia-based scheduled carrier that flies to Koh Samui. So, there are opportunities like that and our business plan will cater for this. The key here is to provide a package deal where we work with dedicated high-end tour operators, hotels and resorts to create synergies across what we already offer.”

Companies Commission of Malaysia (SSM) data shows that in the financial year ended June 30, 2022 (FY2022), Berjaya Air posted a net profit of RM8.35 million, up 430.08% from RM1.57 million in FY2021, a rapid recovery in an industry that was one of the worst hit by Covid-19.

Syed Ali attributes the improved performance to the recovery in BLand’s resorts business, following the re-opening of Malaysia’s borders post-Covid-19. The group saw a spike in charter flights to Redang from Subang airport.

Malaysia Airports Holdings Bhd (MAHB) had earlier announced encouraging recovery momentum in its passenger movements at its network of 39 airports in the country. In the first quarter of 2023, domestic passenger movements have reached 81.2% of 2019 levels. Meanwhile, international passenger movements were at 78.4% of 2019. The airport operator expects the positive momentum to continue into the rest of 2023 and 2024.

The demand for private jet charters in the country has surged in recent years and is showing no signs of waning, even as commercial airline capacity returns. The pandemic has led to an increase in demand for private jets, as high net worth individuals think about ways to avoid crowded airliners and airports. Private jets also allow passengers to avoid the hassle of airport security, long queues and flight delays.

SSM data shows that Asia Jet’s net profit grew 47.26% year on year to RM1.74 million in the financial year ended April 30, 2022.

According to Voo, BLand also has plans for Asia Jet to capitalise on the private aviation boom. The airline operates a Bombardier Global 5000.

“We already have one private jet; we are looking to buy another. We will keep building [our fleet] from there. It is about doing things right instead of doing things fast. At the rate we are going, we are doing it right and fast together. But that doesn’t mean we need to buy 10 or 20 private jets at the moment. We are mindful of not creating overcapacity in the market,” says Voo.

Syed Ali concurs. “Business should make sense. You have to grow by phases. Bookings for our private jet have been back-to-back. In fact, we had to reject some of the business.”

Voo adds: “Still, chartering a private jet can cost US$11,000 (RM49,000) to US$14,000 an hour, whereas for an ATR with an all-business-class configuration, we are looking at charging RM2,000 to RM3,000 an hour.”

He notes that the group is considering the possibility of converting its ASP into an air service licence (ASL) to operate scheduled air services. “Both ASP and ASL have their value, depending on how we want to ride the business. Currently, the ASP is working well for us. Should market demand hold strongly to reach a point where we keep adding capacity to provide more services, it will then probably make sense to fly a fixed schedule over a given week instead of continuing charter services,” he says. 

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.