This article first appeared in The Edge Malaysia Weekly on December 22, 2025 - December 28, 2025

As Sarawak’s own airline AirBorneo Holdings Sdn Bhd begins selling tickets ahead of its full operations next month, public dissatisfaction over flight fares has surfaced.

The Sarawak government took over MASwings Sdn Bhd from Malaysia Aviation Group Bhd to form AirBorneo.

Many had expected lower fares, especially since Sarawak Premier Tan Sri Abang Johari Tun Openg had announced the airline would offer cheaper flights and that its success would be measured by its contribution to the state’s economy rather than profits.

The complaints about airfares are understandable. Current fares remain largely unchanged from MASwings’ pricing or are higher. Yet, expectations should remain realistic in light of commercial viability. Unless the Sarawak government is prepared to subsidise, it is unrealistic to expect significantly lower fares from a newly formed airline operating in a highly competitive domestic aviation market.

The federal government continues to spend RM209 million a year to subsidise 40 rural air services (RAS) in Sarawak and Sabah, operated using turboprop aircraft, even after the state government has taken over RAS.

MASwings’ existing fleet of eight ATR72-500s and six DHC-6-400s underscores the cost-intensive nature of serving 

unprofitable rural routes. Any further fare reductions without compensation would directly threaten AirBorneo’s financial viability.

Sarawak Tourism, Creative Industry and Performing Arts Minister Datuk Seri Abdul Karim Rahman Hamzah aptly summed it up thus: “If we bring down the price right to the minimum until AirBorneo cannot sustain operations, there’s no point. There has to be a balance.”

AirBorneo’s long-term survival depends on its ability to cross-subsidise public service obligations with profitable routes while navigating competition from established carriers such as Malaysia Airlines and AirAsia and operating within Sarawak and Sabah’s relatively small market. Its ambition to introduce jet operations and fly internationally, to destinations such as Singapore and Jeju Island, will only heighten financial pressures.

The collapse of budget carrier MYAirline Sdn Bhd and regional airline SKS Airways Sdn Bhd serves as a cautionary tale. AirBorneo must avoid populist expectations and instead pursue a disciplined strategy that balances public service with commercial sustainability. Only then can it truly serve Sarawak in the long run.

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