Malaysian Government Commits Subsidy for MASwings’ Rural Air Service

The Malaysian government has announced its commitment to provide an annual subsidy of MYR209 million ringgit (USD45.8 million) for MASwings’ rural air service (RAS) flights, even if the carrier changes ownership from Malaysia Aviation Group to the state of Sarawak.

A memorandum of understanding (MOU) was signed between federal transport minister Loke Siew Fook and Sarawak state officials in Kuching on July 20. The existing subsidies are set to continue until 2025, with provisions in the MOU allowing for renegotiation and potential extension beyond that date.

Loke Siew Fook emphasized that the MoU was crucial to ensure the continuation of rural air services without disruption, regardless of any ownership changes. The proposed takeover of MASwings by the Sarawak state government has received “in-principle” support from the federal government.

The state government’s intention is to establish a state-owned scheduled carrier that prioritizes affordable airfares over profit. While reports of an MoU between the Sarawak government and Malaysian Aviation Group were incorrect, ongoing negotiations involve various entities, including the sovereign wealth fund Khazanah Nasional.

Sarawak Premier Abang Johari Openg expressed the desire for a takeover with minimal liabilities to initiate operations with a clean slate. According to the Malaysian Aviation Commission (MAVCOM), MASwings is contracted to operate on 40 RAS routes in Sabah and Sarawak until the end of 2024. These flights are subsidized and supported by the government to connect airports and airstrips within the two states.

Operating exclusively within Borneo, MASwings utilizes a fleet of ten ATR72-500s and six DHC-6-400s. The acquisition of MASwings by Sarawak aims to enhance connectivity between the region and the Malaysian mainland, as well as nearby international airports.

Sources: AirGuide Business airguide.info, msn.com, MASwings