Malaysia’s Sabah Government Takes Cautious Approach to State-Owned Airline Plans Amidst Industry Challenges

In a strategic move, officials from the Malaysian state of Sabah are reevaluating their plans to launch a state-owned airline in the near term. This decision comes in light of neighboring Sarawak’s determined efforts to acquire MASwings (MY, Kota Kinabalu).

Kenny Chau, Chairman of Sabah Air Aviation Sdn Bhd (SAASB), recently tempered expectations, indicating that the prospect of Sabah initiating its own passenger airline may be five years away. This adjustment follows Chau’s earlier announcement that the Sabah government, leveraging SAASB, intended to commence scheduled passenger flights as early as 2024 with three leased aircraft.

Chau’s cautionary stance is influenced by the recent demise of MYAirline, underlining the necessity for any new aviation startup to formulate a robust business case. “What happened to MYAirline was due to financial difficulties. That’s why we need a well-thought-out business plan,” emphasized Chau.

Interestingly, Chau expressed openness to exploring a collaboration with Sarawak, potentially acquiring a stake in their airline, especially considering Sarawak’s more advanced startup plans. Commending Sarawak’s progress in acquiring equity in MASwings, Chau stated, “The Sabah government certainly aims at moving toward the same direction.”

Sarawak Premier Abang Johari Tun Openg has extended an invitation to Sabah officials to participate in the planned takeover of MASwings. Backed by the Malaysian sovereign wealth fund, the premier envisions utilizing a locally-based airline to enhance connectivity between Borneo and cities beyond Malaysia.

The capitals of Sabah and Sarawak, Kota Kinabalu and Kuching, respectively, rank among Malaysia’s top five busiest airports. While already well-connected to the Malaysian mainland through various operators like Malaysia Airlines, Firefly, and AirAsia, MASwings currently facilitates connectivity between these cities and other airports across Borneo. The evolving dynamics present an intriguing landscape for potential collaborations in the Malaysian aviation sector.