AirBorneo is Sarawak-owned, so why does Putrajaya still subsidise it?

AirBorneo may now be owned by Sarawak, but federal subsidies for rural air services remain crucial to ensure residents continue to have access to affordable air travel, especially in areas with limited alternative transport options.

Economist Firdausi Suffian said the need for subsidies should be assessed based on their importance to residents, rather than solely on who owns the airline.

“Without subsidies, transport costs could be much higher, so these subsidies are necessary to help people maintain access, especially in rural areas,” he told FMT.

Under Budget 2027, the federal government is continuing its RM209 million subsidy for rural flights to remote communities in Sabah and Sarawak, benefitting about 820,000 passengers.

The subsidy was maintained despite the transfer of MASwings to Sarawak and its rebranding as AirBorneo, which took effect on Jan 1 this year.

The subsidy funds rural air services (RAS) under a public service obligation (PSO) to ensure essential routes to interior communities continue operating, even where they may not be commercially viable.

However, not all AirBorneo routes receive subsidies.

The transport ministry previously clarified that the Kuching-Sibu, Kuching-Miri and Kuching-Bintulu routes do not fall under RAS and can be operated commercially.

Flights save time, vital during emergencies

For primary school teacher Gwynth Vincent, 33, flights between Kota Kinabalu and Lahad Datu have saved considerable time, particularly during family emergencies or when seeking medical treatment.

Gwynth, who works in Kota Kinabalu, said travelling by road to her hometown in Lahad Datu would take about eight hours, compared with just 50 minutes by air.

She had previously relied on flights to return home when her grandmother fell ill, and to seek specialist eye treatment in Kota Kinabalu.

“During emergencies, time is very important,” she said.

She said travelling by road was not only time-consuming and exhausting, but could also be risky, particularly when driving at night along poorly maintained and unlit roads.

Another civil servant, Michael Roman, 28, also prefers flying for work-related trips between Kota Kinabalu and the various districts along Sabah’s east coast, including Lahad Datu, Sandakan and Tawau.

He said flights took about 45 minutes to an hour, compared with eight to 10 hours by road.

Michael recalled taking the last flight from Lahad Datu to Kota Kinabalu when his uncle was critically ill in hospital.

He said the cost of flying was not significantly different from travelling by road once fuel, meals and, in some cases, rest stops or overnight accommodation were taken into account.

He welcomed government assistance to keep flights accessible, but hoped both the federal and state governments would accelerate road improvements to give residents more transport options.

In Sarawak, civil servant Nuruddin Sabali, 32, uses AirBorneo for work, including trips between Kuching and Mukah, as well as Miri, Limbang and Lawas.

He said RAS subsidies should be maintained because rural flights not only made it easier for residents to travel to major towns, but were also essential for transporting supplies and accessing healthcare.

“Removing the subsidies would increase costs for rural residents,” he said.

Nuruddin said infrastructure conditions in Sabah and Sarawak also differed from those in the peninsula, making air travel essential for some communities.

Access, not just profits

Firdausi said the value of rural flights should not be measured solely by profitability, as the services provided essential access to communities with limited road connections.

He said that besides helping residents obtain medical treatment, flights also facilitated the transport of medical supplies and enabled students from remote areas to pursue their education in towns and cities.

The need for subsidies could diminish if road networks and land transport options improved, said Firdausi.

However, he said the government must ensure that these essential services remain available.

“When residents face difficulties accessing essential services, the government has a role to play through subsidies.

“This is not about whether the investment is productive, but about the welfare of the people,” he said.

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