The Malaysian government may consider opening its subsidized Rural Air Services (RAS) scheme to other airlines in the future despite awarding a seven-year contract extension to incumbent operator MASwings (MY, Kota Kinabalu).

The Chief Operating Officer (COO) of the Malaysian Aviation Commission (MAVCOM), Azmir Zain, told The Edge Malaysia Weekly that government would only explore opening the RAS scheme to other airlines through an open, competitive bidding process in the future.

“The tender system is practised in many jurisdictions around the world for the essential RAS. I do not know whether Malaysia would want to put this in place immediately, but it is something we should contemplate over the long term. To ensure there is no disruption to RAS, we need to weigh that accordingly."

“MASwings is the incumbent for RAS. It is familiar with the operations. The tender system is on the table, but perhaps not to implement immediately,” he said.

However, Zain noted that some RAS airfares will go up this year as government has withdrawn subsidies for select routes between major towns, such as Kota Kinabalu to Sibu, which are now served by other airlines on a commercial basis.

Government is transferring oversight of RAS from the Ministry of Transport to MAVCOM, Zain said. As part of the transfer, MAVCOM is looking to introduce several clauses into the new contract with MASwings.

“We are currently ironing things (the final RAS for the next seven years) out with MASwings, the transport ministry and the Sabah and Sarawak governments. Once that has been properly agreed and defined, we are going to translate that (RAS) into a legal document and implement it later this year,” he said.

RAS currently allocates annual subsidies of MYR190 million (USD42.9 million) to the Malaysia Airlines (MH, Kuala Lumpur International) unit to run regular passenger flights to forty-nine remote towns around Malaysia using ATR72-500 and DHC-6-400 equipment. Of the routes, ten airports and fourteen airfields are in Sabah and Sarawak.