SEPANG: The government has taken out two routes under the Rural Air Services (RAS) agreement, Kota Kinabalu-Sibu and Kota Kinabalu-Bintulu to be operated by AirAsia beginning January, 2019, said Transport Minister Loke Siew Fook.
He said the cabinet has recently approved AirAsia Group Bhd's commercial flight operations for these two routes, and subsequently would compensate MASWings Sdn Bhd for this new operations by AirAsia.
"We have taken out these two routes from the RAS agreement, allowing commercial airlines to operate it. These are the routes with high demand and considered as not rural areas anymore," he told reporters after officiating AirAsia special announcement ceremony, here, today.
Loke pointed out that the government seeks to gradually reducing its RAS subsidy to maintain flight services to rural areas.
"The ceiling-price for RAS subsidy is expected to go down beginning 2020 on reduced operational expenditure by MASWings on these routes," he added.
Loke said the cabinet's approval would see the termination of the current operator, MASWings which supposedly ended by 2024.
Under the Budget 2019, the government has allocated up to RM230 million for the RAS framework, taking into consideration the compensation to be paid to MASWing.
For 2018, the government had allocated up to RM190 million for the RAS framework.
Previously, the government has commercialise routes under the RAS framework including from Kota Kinabalu-Tawau, Kota Kinabalu-Sandakan, Kota Kinabalu-Miri, Kuching-Sibu, Kuching-Bintulu and Kuching-Miri.
"We hope this initiative would reduce government's subsidy, while reducing air fares and add more commercial flight capacities for these two routes," he said.
Loke said the KK-Sibu and KK-Bintulu were among the over 30 RAS routes in Sabah and Sarawak operated by MASwings with the government's subsidy due to its non-commercially viable environment.
"AirAsia and MASwings can now compete on the same level playing field (no subsidy)," he said.
Loke said the new Operating Agreement between the government and AirAsia would be signed by this year-end to finalise the deal, which would include the compensation amount for MASwings.
He said AirAsia will have a six years contract ending 2024 to operate the KK-Sibu and KK-Bintulu routes.
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