Why were Kuching-Sibu, Kuching-Miri, and Kuching-Bintulu removed from PSO?

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Kuching-Sibu, Kuching-Miri, and Kuching-Bintulu Routes No Longer Qualify for Public Service Obligation Subsidies

The Kuching-Sibu, Kuching-Miri, and Kuching-Bintulu air routes have been reclassified as intercity flights, thus no longer meeting the criteria for Public Service Obligations (PSO) and the associated subsidies. This change stems from a 2017 review of Rural Air Services (RAS) by the Malaysian Aviation Commission, which determined that these routes no longer fulfilled the definition of PSO. The joint operation of these routes by MASwings with other airlines, such as AirAsia and Malaysia Airlines, was a key factor in this reclassification.
Routes Reclassified Following 2017 RAS Review

A comprehensive review of Rural Air Services conducted by the Malaysian Aviation Commission in 2017 led to the reclassification of several key Sarawak routes. Specifically, the routes connecting Kuching to Sibu, Miri, and Bintulu were identified as no longer fitting the definition of Rural Air Services. This reassessment was based on operational and market dynamics observed at the time.
Joint Operations Removed PSO Eligibility

The primary reason for these routes losing their PSO status was their joint operation by MASwings alongside other commercial carriers like AirAsia and Malaysia Airlines. Public Service Obligations are typically designated for routes that serve essential connectivity needs without sufficient commercial viability, often implying a sole operator or a specific mandate. When multiple airlines operate on a route, it suggests a level of commercial competition and demand that negates the need for PSO designation and its inherent subsidies.
Intercity Status Means No Subsidy Entitlement

As a consequence of being reclassified as intercity flights, these routes are now considered similar to other inter-city services in Peninsular Malaysia, which do not receive government subsidies. The Transport Ministry indicated that flights on these routes should not be subsidised because they connect two cities within the region, aligning them with standard commercial air travel. This shift aims to reflect the commercial nature of these operations.
Commercial Status Encourages Wider Airline Participation

The transition of these routes to a commercial status is intended to foster a more competitive air travel market in Sarawak. By removing them from the PSO framework, the government aims to encourage local airlines, such as AirBorne, to apply for and operate these services on a commercial basis. This move is expected to lead to increased flight options and potentially better services for air travellers in rural Sabah and Sarawak.

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Why were Kuching-Sibu, Kuching-Miri, and Kuching-Bintulu removed from PSO?

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