Malaysia’s SKS Airways Halts Operations Amid Funding Woes and E195-E2 Order Uncertainty

Malaysian carrier SKS Airways (KI, Johor Bahru) has suspended its scheduled flight operations due to reported funding challenges, raising concerns about the fate of its order for ten Embraer E195-E2s. The carrier, which started operations in 2022, is facing financial difficulties, jeopardizing its position as Malaysia’s first Embraer operator.

The New Strait Times disclosed on November 20 that SKS Airways, primarily operating DHC-6-300 and Twin Otter aircraft, has ceased scheduled services on key routes such as Kuala Lumpur Subang to Tioman and Kuala Lumpur Subang to Pulau Redang. The carrier’s booking portal currently shows no available flights for the remainder of the year.

SKS Airways, owned by SKS Group with interests in property development, investment holdings, hospitality, and credit finance, entered the market with a focus on domestic, short-range, leisure, and commuter flights to underserved destinations. The carrier’s suspension of services follows a similar move by MYAirline in October, citing financial difficulties.

Reports suggest that SKS Airways’ Twin Otter operations, consistently unprofitable, are unlikely to resume. In May, the airline signed a lease agreement with Azorra Aviation for ten Embraer E195-E2 regional jets, with deliveries initially set for early 2024. However, the carrier is reportedly grappling with financial constraints to meet the payment obligations for the aircraft. As a result, SKS Airways is said to have postponed the first E2 deliveries to the second quarter of 2024.

Financial news outlet The Edge reported that SKS Airways engaged in funding discussions with potential investors, including Malaysia Aviation Group, the owner of Malaysia Airlines. Malaysia Aviation Group declined to provide capital, prioritizing its in-house fleet renewal. An SKS spokesperson mentioned that they would favor parties with strategic contributions to the airline when considering equity participation.

In response to inquiries, a SKS spokesperson acknowledged inaccuracies circulating about the airline but declined to provide details. The spokesperson assured that a statement would be issued soon to provide accurate information.

In a separate development, there are unconfirmed reports that SKS CEO Dzuleira Abu Bakar tendered her resignation last week, adding another layer of uncertainty to the airline’s situation. Abu Bakar had assumed the role in June of this year.