SEPANG: AirAsia Group Bhd is set to take over the Kota Kinabalu (KK)-Sibu and KK-Bintulu routes from MASwings Sdn Bhd starting January 2019 following the Cabinet’s approval last week.
Transport Minister Anthony Loke said the contract with MASwings, the current route operator, which was supposed to end in 2024, would be terminated and this would help the government save between RM10 million and RM20 million for both routes from 2020 onwards.
“We hope this will reduce government subsidies and at the same time reduce air fares and increase flight capacity for both sectors,” he told reporters at an AirAsia’s event to announce additional late night flights for the upcoming Chinese New Years yesterday.
The KK-Sibu and KK-Bintulu were among over 30 Rural Air Service (RAS) routes in Sabah and Sarawak managed by MASwings and subsidised by the government as they are deemed non-commercially viable.
Loke said the 2019 Budget proposed an allocation of RM230 million ceiling price for the RAS subsidy, which included the compensation for MASwings compared with the subsidy bill of RM190 million this year.
He said the commercialisation of the routes would help the government to gradually reduce the ceiling price for subsidy from 2020 onwards.
The government had previously commercialised six RAS routes, namely KK-Tawau, KK-Sandakan, KK-Miri, Kuching-Sibu, Kuching-Bintulu, and Kuching-Miri.
“If MASwings wants to resume flying this route, they have no problem to continue operating but will not get the subsidies.
“They (AirAsia and MASwings) can compete on the same level playing field (without subsidies),” he said.
Loke said a new Operating Agreement between the government and AirAsia would be signed by year-end to finalise the deal, which would include the compensation amount for MASwings.
He said AirAsia would have a six-year contract ending 2024 to operate the KK-Sibu and KK-Bintulu routes.
The Sabah Association of Tour and Travel Agents (SATTA) welcomes the announcement by Loke on AirAsia Group Bhd taking over the Kota Kinabalu-Sibu and KK-Bintulu routes from MASwings Sdn Bhd starting January 2019.
Its president, Datuk Seri Winston Liaw, said the move would enhance tourism between Sabah and Sarawak.
Furthermore, he said tourists from China and Korea would be able to get cheaper fares when they travel to Sarawak via KK, which augurs well for Sarawak’s tourism.
“For Sarawakians, they can hop on these low fare flights to connect to North Asia regions like China, Taiwan, Korea and Japan. This in turn will benefit KK as some of these tourists will stay overnight here to catch connecting flights, while some will choose to go sightseeing in KK for two or more days,” he said, when asked to comment yesterday.
Liaw also urged AirAsia to fly to Brunei as well as statistics showed a continuous downtrend on arrivals from Brunei.
“In general, Sabah is growing rapidly, but we must keep the increase in air arrivals together with our infrastructure, hotel rooms and environment at the same pace so that the tourism industry will grow steadily.”