For Airborneo Business Viability Just As Important As Public Service Says Expert

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Sarawak premier Abang Johari Openg (right), transport minister Loke Siew Fook (centre) and Sarawak deputy premier Awang Tengah Ali Hasan at a ceremony in Kuching on Feb 12 to formalise the takeover of MASwings. (Bernama pic)
PETALING JAYA: AirBorneo needs a clear roadmap to financial sustainability even as it prioritises social services, according to a transport expert.
Finding a balance between public service and commercial viability is key, transport consultant Wan Agyl Wan Hassan said in response to Sarawak premier Abang Johari Openg’s recent statement that he did not expect the airline to be profitable.
Abang Johari said the airline’s success would be measured more by its contribution to Sarawak’s overall economy than its financial gains.
Sarawak officially took over MASwings and rebranded it as AirBorneo last month.

Wan Agyl praised Abang Johari for his bold vision but warned that state-backed airlines worldwide have had mixed fortunes. “Sarawak should take lessons from both success stories and cautionary tales,” he told FMT.
He also pointed out that many national carriers have struggled with over-expansion and financial mismanagement, leading to heavy reliance on government bailouts.
“Finding a balance between public service and commercial viability is key,” Wan Agyl said.
He said AirBorneo could be strategic by offering profitable routes to offset the cost of essential but less profitable ones rather than rely purely on government support.
“If done right, AirBorneo can become a true enabler of economic growth and connectivity for Sarawak, rather than just another state-owned airline burdened by financial strain,” he added.
Transport minister Loke Siew Fook said despite the fact that Sarawak has now acquired MASwings, Putrajaya will continue to subsidise the cost of flying the 40 rural air services (RAS) routes in Sarawak and Sabah. Those sectors are covered by turboprop aircraft.
Wan Agyl said AirBorneo should also take a “cautious approach” to expansion with jet operations, pointing out that while flying international routes like Bali and Shenzhen is “exciting”, the airline should make it its priority to strengthen domestic and intra-Borneo connectivity.
He said the airline should give those living in small towns and rural areas better access to urban centres rather than shift its focus to regional tourism markets.
Abang Johari had said earlier that there are plans to connect Kuching to key destinations such as Jakarta, Bali, Hong Kong and Shenzhen.
Singapore-based aviation consultant Brendan Sobie said he did not expect AirBorneo’s proposed jet operations to be profitable considering the fierce competition in Malaysia’s aviation market, the new airline’s small sub-scale size and the small size of the Sarawak market.
Sobie said the Kuching-Kuala Lumpur sector, which sees the highest demand, is also very competitive. “The average fares are low, making it difficult for AirBorneo to be profitable as a small player,” he added.
On the other hand, he said, the international routes that the airline hopes to cover are not in high demand, and therefore more likely to be unprofitable.
Sobie also expects the turboprop operations servicing RAS routes to incur increased losses given that AirBorneo will not enjoy the many synergies that MASwings had as part of the Malaysia Aviation Group.
“While the federal government is willing to continue covering the losses of the turboprop operations, the state government will have to cover the losses incurred by the jet operation,” he added. - FMT

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