AirBorneo is set to progressively expand beyond its Public Service Obligation (PSO) mandate as it transitions into a full-service airline, with plans to strengthen air connectivity to major domestic cities and regional destinations, including Kuala Lumpur, Kota Kinabalu, Jakarta and Singapore by the third quarter of 2026.
Transport Minister Datuk Seri Lee Kim Shin said the expansion would be subject to regulatory approvals and operational readiness, with the airline planning to lease three Boeing B737-800NG aircraft for its maiden scheduled jet services.
“Concurrently, AirBorneo will progressively expand beyond the PSO mandate as a full-service airline, strengthening connectivity with major domestic cities and regional destinations,” he said in his ministerial winding-up speech during the DUN sitting here today (May 18).
Lee said the development comes as Sarawak continues to strengthen its aviation sector following encouraging growth in passenger and aircraft movements.
He said that as of the first quarter of 2026, Sarawak recorded 34,758 aircraft movements, an increase of 7.14 per cent, while passenger movements rose to 2.8 million, marking a 9.58 per cent growth compared to the same period in 2025.
The state also recorded an average of 46 weekly international flights and 533 weekly domestic flights from other Malaysian states, while within Sarawak, an average of 670 weekly flights continued to connect major towns and rural areas under the Rural Air Services.
Lee said Sarawak’s international connectivity had also been strengthened with the introduction of the Haikou–Kuching route by air, as well as the recent launch of the Guangzhou–Kuching direct scheduled charter flight operated by Batik Air on March 18, 2026.
“My ministry will continue to work closely with airlines and partner agencies to attract more direct international routes, further positioning Sarawak as an emerging aviation transit hub in the region,” he said.
Lee also explained that AirBorneo, following the successful acquisition of MASwings, began operations on Jan 1, 2026, taking over Rural Air Services (RAS) across Sarawak, Sabah and Labuan.
He said RAS remains a critical service under the PSO framework, ensuring continued air connectivity for rural and remote communities on commercially non-viable routes, with federal subsidy support and regulated fare structures.
Unlike commercial carriers, Lee said RAS operations are guided by social obligations under the Federal Constitution rather than market-driven profitability.
He added that as a future full-service airline, AirBorneo would offer enhanced travel experiences including multiple cabin classes, complimentary in-flight services, through-checked baggage, lounge access and improved international connectivity via code-sharing partnerships and airline alliances.
Lee also highlighted that airfares globally are determined through dynamic pricing influenced by demand, booking patterns, fuel costs and seasonal travel peaks, and encouraged the public to plan early to secure more affordable tickets.
He said the government acknowledged public concerns over rising airfares but stressed that a balanced approach was needed to ensure both passenger protection and the financial sustainability of airline operations.
