KOTA KINABALU, Feb 9 — Putrajaya will extend its contract with MasWings to provide rural air services to Sabah and Sarawak but will cut flight subsidies to several major towns that are already being served by private airlines.
Transport Minister Datuk Seri Liow Tiong Lai said the government will extend the Malaysia Airlines subsidiary’s concession, which expires early next year, for seven years, at the cost of about RM190 million in subsidies.
“We want to continue to support the local communities in Sabah and Sarawak so we have agreed to extend our contract with MasWings to provide air service to these rural towns where land transport takes too long,” he said.
Liow was speaking to reporters at Sabah MCA’s Chinese New Year open house at the Kota Kinabalu High School here.
The minister said the government will continue to work towards keeping costs low for the rural towns but added that there was a need to review the current routes of some 49 destinations in east Malaysia.
“We will be reviewing it to see which still need subsidies and which can be cut. Those that are plied by private airlines will be cut,” he said, naming Sibu and Kota Kinabalu as examples of destinations already being served by airlines like AirAsia and Malindo Air.
“We will only subsidise routes that are only plied by us, to serve the rural areas that need help,” he said, adding that Putrajaya has agreed in principle to extend the concession but has yet to decide on which routes to cut.
Liow also said that Putrajaya will allow MasWings the freedom to expand its operations and serve the Brunei Indonesia Malaysia Philippines ― East Asean Growth Area (BIMP EAGA) region if they wished to do so.
“This is under their own private initiative but we will not be subsidising those. We don’t place any restriction on them for their expansion ― they don’t have to use certain aircrafts like the turboprop or the ATR, it is up to them,” said Liow.
Source from The Malaymail Online