Sarawak Premier Tan Sri Abang Johari Tun Openg.- ZULAZHAR SHEBLEE/The Star
KUCHING: Disagreements over the asset value of MASwings are delaying the Sarawak government’s acquisition of the airline from Malaysia Aviation Group (MAG).
The Sarawak government and MAG, the parent company of MASwings Sdn Bhd, have not been able to see eye-to-eye on their respective assets valuations of MASwings, resulting in the formal sale-and-purchase agreement between them fixed to be signed on Dec 31, 2024, not materialising.
The Sarawak government, the Transport Ministry and Malaysian Aviation Commission (Mavcom) had earlier agreed to Sarawak taking over MASwings which currently serves routes in Sarawak and Sabah.
According to Sarawak Premier Tan Sri Abang Johari Tun Openg, due to the differences in valuation of assets, a formal agreement on MASwings’ acquisition could not be inked last month.
“The only remaining issue is asset valuation. We have our valuation and they have theirs.
“To resolve this, we need a third party to adjudicate. Both sides have their own audit teams and we are now in the negotiation phase,” he said recently.
Abang Johari now expects the acquisition of MASwings to be finalised in first quarter of 2025 (1Q25).
Headquartered in Kota Kinabalu International Airport, MASwings currently owns and operates a fleet of 16 aircrafts serving 23 destinations in Sarawak and Sabah.
The aircraft fleet comprises of 10 units of ATR 72-500, which can accommodate 68 passengers each and six units of 19-seater Viking Air DHC-6-400 Twin Otter.
MASwings received the ATR 72-500 aircraft between 2008 and 2010 and retired its last Fokker 50 in April 2010.
By 2013, the six brand-new DHC-6 Twin Otter Series 400 entered the service and replaced the aging Twin Otters.
The Twin Otters are used for rural air service to isolated communities with limited infrastructure such as the highlands like Bario, in northern Sarawak.
MASwings utilises the Miri Airport as its primary hub for the Twin Otter operations with Kuching International Airport as a secondary hub.
Established as a regional airline in 2007, MASwings provides essential air connectivity to remote and rural areas in Sarawak and Sabah under the rural air services programme.
It initially operated 450 weekly flights to 22 destinations across Sarawak and Sabah using a fleet of Fokker 50 and DHC-6 Twin Otter.
In 2010, MASwings expanded its operations focusing on international routes within the Brunei-Indonesia-Malaysia-Philippines East Asean Growth Areas.
It had then operated flights on routes including Kota Kinabalu -Bandar Seri Begawan (Brunei), Kota Kinabalu-Puerto Princesa (Philippines), Kuching-Pontianak (Indonesia) and Tawau-Tarakan (Indonesia).
The Covid-19 pandemic in 2020 had significantly impacted MASwings’ operations as it had resulted in flight suspensions due to movement control orders and a sharp drop in passenger traffic.
In 2022, the carrier discontinued its sole remaining international route (Tawau-Tarakan flight) to focus exclusively on domestic operations.
In 2019, MASwings entered into a new Public Service Obligation agreement with the federal government to operate the rural air services across 40 routes in Sabah and Sarawak until 2024.
This agreement included an annual subsidy of RM209mil to cover operational costs and maintain connectivity to underserved regions.
Transport Minister Anthony Loke had announced recently that the annual subsidy will be extended to 2025.
Once the sale-and-purchase agreement is inked between the Sarawak government and MAG, the transfer of ownership of MASwings is expected to take between six and nine months and it then needs to work on getting approvals from the relevant authorities on its planned international expansion.
Abang Johari has already made known the Sarawak government’s ambitious plan to transform MASwings into a regional carrier, serving international destinations with a four-to-seven hour air travelling time, besides existing domestic routes.
The target destinations include South Korea, Japan, Hong Kong, Thailand, Indonesia and as far as Frankfurt, Germany, in efforts to boost Sarawak tourism. MASwings will acquire long-haul aircraft to services these international routes.
Abang Johari said MASwings will be rebranded with a new identity.
He said a new name has been chosen but will only be unveiled on conclusion of the MASwings’ acquisition agreement.
The rebranding of MASwings is expected to be undertaken under the management of Hornbill Skyways, a state-link aviation operator with Sarawak Foundation and Sarawak Timber Industry Corp as its major shareholders.
Established in 1977 to cater for Sarawak’s growing demand for aviation services, Hornbill Skyways currently operates a fleet of 14 aircraft that includes one executive jet, turboprop planes and Bell Ranger and Eurocopter helicopters.
