The state governments of Sabah and Sarawak have expressed an interest in acquiring control of domestic operator MASwings (MY, Kota Kinabalu) with a view to redeveloping it into a regional carrier the Malaysian Insider has reported.

According to the newspaper, Sarawak's Minister of Tourism, Datuk Amar Abang Johari Tun Openg, told the state legislative assembly that the governments of the two Borneo states would each hold a 50% share in the carrier should their proposal be approved. Both states claim they are dissatisfied with the amount of coverage they receive and thus see the airline as a panacea to their low tourist numbers.

An offer has thus been submitted to the country's sovereign wealth fund and sole shareholder of MASWings' parent, Malaysia Airlines (MH, Kuala Lumpur International), which, if successful, could see MASwings being reoriented towards the southeast Asian tourism market. Among the destinations being considered, Openg said, are southern China, Hong Kong, BIMP-EAGA (Brunei Darussalam-Indonesia-Malaysia-The Philippines and the East ASEAN Growth Area), and cities such as Bangkok, Singapore and Jakarta.

Last year local media reports claimed Khazanah was considering relaunching MASwings as an independent budget carrier targeting China with a fleet of four leased jets based out of Kota Kinabalu.

Currently, MASwings specializes in flights to Malaysia's more remote regions as well as to Tarakan and Pontianak in Indonesia, and Bandar Seri Begawan in Brunei using a fleet of fourteen ATR72-500s and -600s, and six DHC-6s.