A Malaysian MP has spoken out against a push by Sarawak premier, Abang Johari Openg, to establish a state-owned airline in Sarawak, despite the plan enjoying the in-principle support of the Malaysian prime minister.
The Borneo Post reports Bandar Kuching MP Dr Kelvin Yii, a member of the opposition Democratic Action Party, saying the potential airline was likely to incur significant costs and a thorough and transparent business plan should be conducted before any government funding is approved. As previously reported in ch-aviation, the Sarawak premier is actively campaigning for the Malaysian government to fund, via its sovereign wealth fund, his planned startup airline which would be operated by local general aviation and charter entity Hornbill Skyways (Kuching).
"The premier mentioned that they are looking at obtaining at least four turboprop 120-seater aircraft. A general search shows that it may cost up to MYR155.6 million ringgits (USD34.9 million dollars) each, which converts to MYR623 million (USD139.7 million) for all four aircraft, which again depends on its specifications," said the MP. "It’s important to note that the cost of purchasing an aircraft is just one part of the overall cost of ownership, which includes ongoing maintenance, fuel, insurance, and other expenses."
Yii argues the final cost of establishing the premier's "boutique" airline will run into the billions of ringgits, and that's before any subsidies are paid to make flights affordable to Sarawak residents. Affordable flying is the key pillar of Johari Openg's argument in favour of the airline.
"I will be grateful if the (Sarawak) state government is more transparent with the full deal so we can get a better picture of the whole venture itself,” he said. Yii also noted that the Malaysian government subsidised MASwings (MY, Kota Kinabalu) to operate flights to 49 airports in Sarawak using a fleet of ATR72-500s and DHC-6-400s. The annual subsidies are MYR190 million (USD42.6 million), and Yi suggests expanding this program, if required, would be a more cost-effective alternative.
“My concern has always been that Sarawak may not have the economies of scale to keep it sustainable, and over a period of time Sarawak will have no choice but to use huge sum of our public funds to bail out the airline to keep it afloat."
But the premier's proposed airline does have its supporters. The CEO of a general aviation and charter airline located in the neighbouring state of Sabah, Sabah Air Aviation Sdn Bhd (SAASB), is behind the idea, arguing that such an airline would benefit not just Sarawak but all of Borneo.
“Like Sarawak, we, in Sabah, have always faced the problem of high airfares. So, this is a solution that fits well with us in Borneo," SAASB CEO Rodney Linus told Malaysia's Daily Express. "Although it’s been our dream to establish Sabah’s own airline, we’re also looking at the entire aviation eco-system which we aspire to create that would serve not just our state but Borneo in general. On various occasions, SAASB and Hornbill Airways discussed matters that concern our people, including setting up our own airline. We’re delighted to learn that Sarawak has taken the lead."
According to ch-aviation capacities data, the sector between the Malaysian capital of Kuala Lumpur and the state capital of Sarawak, Kuching, is the second busiest in the country, while the sector between Kuala Lumpur and the state capital of Sabah, Kota Kinabalu, is the busiest. Seven scheduled passenger carriers fly both routes.
Sabah's tourism minister, Seri Abdul Karim Rahman Hamzah, hit back at Yii's criticisms earlier this week, saying the opposition party politician was fearful of the airline proving popular with the people and reflecting well on the incumbent government.
"The moment we go fast and set up the airline more people will be supporting us," Karim said. "That is why the opposition has been critical of us, not just with the airline, but also with other things that we have done for the state."
