Sarawak Government Open to Malaysia Aviation Group Retaining Stake in MASwings Takeover

The Sarawak state government in Malaysia has expressed openness to the Malaysia Aviation Group (MAG) retaining a minority shareholding in MASwings if the government’s bid to take over the airline succeeds. Sarawak Premier Tan Sri Abang Johari Openg revealed this during the signing of a memorandum of understanding (MOU) with Hornbill Skyways, a general aviation operator owned by the Sarawak government, and MAG.

Pending the completion of talks and due diligence, the Sarawak government aims to complete the MASwings takeover within three months. Premier Johari Openg stated the government’s desire for a majority stake in MASwings but acknowledged the possibility of MAG retaining some shares in the airline. The MOU outlines plans for managing MASwings under Sarawak government ownership, with Hornbill Skyways playing a significant role.

While MAG Managing Director Izham Ismail did not disclose intentions regarding retaining a stake in MASwings, Premier Johari Openg mentioned that negotiations with officials from Khazanah Nasional Berhad, Malaysia’s sovereign wealth fund, are ongoing. The premier envisions tapping into the fund to finance the MASwings acquisition.

Premier Johari Openg aims to transform MASwings into an operator serving longer sectors of six or seven hours, expanding beyond Borneo to reach regional cities. The goal is to connect destinations like Korea, Hong Kong, Japan, India, and Australia. MASwings, currently operating ATR72-500s and DHC-6-400s, could potentially acquire new aircraft for these extended routes.

Highlighting a unique operating model, Premier Johari Openg emphasized that the focus would be on providing cost-competitive fares rather than maximizing profit. The plan involves maintaining a small fleet and ensuring high aircraft utilization to generate revenue. The premier described the envisioned airline as a “boutique airline” serving regional routes.

The due diligence process is underway, and discussions with Khazanah Nasional Berhad continue, with Premier Johari Openg expressing optimism about completing the MASwings takeover and commencing operations in the next year. Stay tuned for further developments as negotiations progress and plans for MASwings’ future take shape.