NEW AIRLINE - Brunei's Gallop Air talks down chances of a 2H24 launch

The CEO of Brunei-based startup Gallop Air says a planned launch in the latter half of 2024 may be pushed back because the airline still needs to secure regulatory approval, aircraft, and financing.

Speaking to the BizBrunei outlet earlier this month, CEO Cham Chi said Gallop Air is working through the first stage of a five-stage approval process to secure an air operator's certificate (AOC) from Brunei's Department of Civil Aviation. Cham says he expects to conclude the initial stage of the AOC process and move into the next step by the end of the year. The airline must also secure approval from China's Civil Aviation Administration (CAAC), which may impose certain conditions on Gallop owing to its startup status. China is the likely first destination for Gallop, but Cham says if the CAAC lays down requirements they cannot quickly meet, Gallop will switch to another country to launch.

"We still want to start commercial flights in Q3 next year, but we need to follow all the government regulations,” said Cham. The low-cost carrier, the only one of its type to be based in Brunei, is 95% owned by a Singapore-based entity called GallopAir Private Limited. In turn, that entity is wholly owned by China's Shaanxi Tianju Investment Group. Shaanxi is majority-owned by Yang Qiang, a Chinese businessman who chairs both the Shaanxi and Gallop Air boards. Minority China-based investors have taken up the remaining 5% stake in GallopAir Private Limited. Cham says Yang is "very passionate about the aviation industry" and has some experience in the industry, primarily through running a helicopter business in Northwestern China and a travel business that has previously chartered aircraft.

In September 2023, Gallop Air signed a letter of intent (LOI) with COMAC to take thirty aircraft, a mix of ARJ21-700 and C919 types. Cham says the order, which is yet to be firmed up, would see Gallop taking three to five aircraft over seven years. When signing the LOI, neither party specified the type breakdown or delivery timeline, but Cham says the order will be evenly split between the ARJ21 and C919, with deliveries of the C919 set to start in about five years' time. The initial network will align with the capabilities of the ARJ21, which has a listed range of up to 3,700 kilometres.

One month after signing the LOI, ch-aviation reported that Gallop Air was talking with investors, the Brunei government, and local entities about "opportunities for collaboration and investment." At the time, Cham also said talks with banks and lessors were underway about funding the aircraft acquisitions. Cham told BizBrunei that Gallop remained keen to secure the Brunei government's support and investment.

Cham adds that the successful launch of Gallop Air will improve connectivity in and out of Brunei and ties between Brunei and China. While Brunei is one of Asia's richest (and smallest) nations, it is also strengthening its ties with China. That country is an increasingly important trading partner for Brunei and is its largest source of direct foreign investment.