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Sarawak Government Welcomes Sabah Investment in AirBorneo

August 19, 2025By ePlane AI
Sarawak Government Welcomes Sabah Investment in AirBorneo
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AirBorneo
Sarawak Government
Sabah Investment

Sarawak Government Welcomes Sabah Investment in AirBorneo

Openness to Sabah Participation Amid Acquisition Plans

The Sarawak government has expressed a willingness to accept investment from neighbouring Sabah in the forthcoming AirBorneo airline, which is set to be rebranded following the acquisition of MASwings. Sarawak Premier Abang Johari Openg emphasized that while Sabah’s involvement is welcomed, it is not essential for the acquisition to proceed, as Sarawak has already secured sufficient capital independently. Speaking at an event in Belawai, Abang Johari remarked, “If they want to share, we can share with them. It is still open. We can share with Sabah; there is nothing wrong with that, as both are on the island of Borneo.”

Sabah officials had initiated discussions with Sarawak in mid-August regarding potential investment but have since indicated a preference to delay their decision, possibly to evaluate their own financial readiness. This dialogue reflects the broader regional ambitions of both states to enhance connectivity and economic integration within Malaysian Borneo.

Strategic Acquisition and Future Prospects for AirBorneo

Sarawak is advancing plans to acquire MASwings, currently headquartered in Kota Kinabalu and owned by Malaysia Aviation Group. The acquisition will see the airline rebranded as AirBorneo, with its headquarters relocated to Sarawak. The state government aims to complete the acquisition and obtain all necessary regulatory approvals by the end of 2025. This process involves navigating complex aviation regulations and meeting stringent safety standards, which are critical to the successful relaunch and operation of the carrier.

AirBorneo is expected to transition from MASwings’ current focus on subsidised Rural Area Services (RAS), which operates a fleet of eight ATR72-500s and six DHC-6-400s, to a hub-and-spoke model designed to enhance both domestic and international connectivity. While the regional RAS routes will be maintained, the airline’s expansion is anticipated to strengthen Sarawak’s position as a key aviation hub, with Kuching serving as the main airport.

Regional Implications and Market Dynamics

Both Sarawak and Sabah enjoy significant regional autonomy within Malaysia’s federal system, including fiscal powers, and together control most of Malaysian Borneo, excluding the federal territory of Labuan. Collaboration between the two states could reinforce regional connectivity and economic integration, potentially benefiting the broader Borneo region.

Market analysts suggest that Sabah’s potential investment in AirBorneo could increase investor confidence in Borneo’s aviation sector, potentially stimulating tourism and wider economic growth. However, this development may also provoke competitive responses from other regional airlines, which might seek to enhance their service offerings or expand routes to protect market share.

Currently, MASwings operates exclusively within Borneo and does not serve destinations in peninsular Malaysia. As Sarawak moves forward with its plans, the regional aviation landscape is poised for significant transformation, presenting both opportunities and challenges for AirBorneo and its stakeholders.

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