Kota Kinabalu-based general aviation operator Sabah Air Aviation Sdn. Bhd, known as Sabah Airlines, is eyeing scheduled passenger operations as soon as next year, with an initial fleet of three leased aircraft.

Local media are reporting on comments made by Sabah Air Aviation Sdn Bhd (SAASB) Chairman Kenny Chua who said the lease agreement "not limited to Boeing or Airbus aircraft," would be signed by the end of the year. "Negotiations are happening in stages," he said. "Who knows, we may even launch earlier than Sarawak," in reference to plans in the neighbouring state to launch their own airline. Presently, those plans involve taking control of MASwings (MY, Kota Kinabalu) from the Malaysia Aviation Group.

Sabah Air was established by the Sabah state government in 1975. It was originally formed to provide air transport services to the people of Sabah, including aeromedical transfers and oil rig support flights. According to its website, its fleet includes four Bell Helicopter 206 Jetrangers, one AgustaWestland 109S Grand helicopter, three Airbus AS355NP helicopters, one GAF N22B Nomad, and one Beech (twin turboprop) King Air 200.

Chua says his plan involves Sabah Air (which may brand its new operation by another name) operating as a low-cost carrier along the lines of AirAsia (AK, Kuala Lumpur International) and Firefly (FY, Penang), both of which already serve the busy Kota Kinabalu - Kuala Lumpur International route. He says the influx of foreign money into Sabah has swelled the government's coffers, enabling them to look at starting a commercial airline service. Sabah Air's revenues have also improved recently after securing some closed charter contracts in the oil and resources.

"We need our own airline," said Chau. "We have the licensing, the aviation engineers, the pilots and our own airports. Nothing can hold us back anymore."