KUCHING: AirBorneo’s economically strategic cautious launch next year will position Sarawak for stronger regional connectivity and incremental growth.
Swinburne University of Technology Sarawak’s lecturer, Dr Nivakan Sritharan, said that launching in early 2026 allows AirBorneo to align with Visit Malaysia Year 2026, prepare for future infrastructure such as the new Kuching International Airport, and build operational capacity before major international expansion.
“This sequencing reflects a risk-mitigation approach commonly recommended in aviation strategy, where consolidation precedes aggressive growth. The timing appears cautiously strategic rather than aggressive.
“Besides, the global aviation sector has stabilised after the severe disruptions of the pandemic, with passenger demand in Asia showing steady recovery, although fuel price volatility and economic uncertainty remain risks,” he told Sarawak tribune today.
He added that AirBorneo’s most immediate economic impact will not be felt in cheaper airfares or surging passenger numbers, but in the stabilisation and strengthening of regional connectivity within East Malaysia.
By taking over routes previously operated by MASwings, the airline will maintain essential air links between rural and remote communities and major urban centres, facilitating access to healthcare, education, government services, tourism, and commerce.
“However, given the airline’s current focus on small aircraft operations and gradual capacity building, significant changes in airfares or traffic volumes are unlikely in the short term.
“The broader economic impact will therefore emerge progressively, particularly as Sarawak prepares for higher tourism inflows linked to Visit Malaysia Year 2026 and planned regional and international route expansions,” he added.
Despite its potential, AirBorneo may face structural sustainability challenges common in the aviation industry, which is known for high fixed costs, thin profit margins, fuel price volatility, and intense competition.
“New airlines, particularly those servicing socially necessary but commercially marginal routes such as rural flights, often face financial pressures during their early years.
“AirBorneo must balance commercial discipline with its public service mandate, which creates structural sustainability challenges.
“Managing aircraft leasing and maintenance costs, staffing, regulatory compliance, and fuel expenditure will be critical, while demand growth may initially be modest,” he said.
Nivakan stressed that without phased growth and disciplined cost management, early operating losses could persist, as highlighted in the ICAO’s 2021 Air Transport Economic Development Report.
He said sustainability will depend on operational efficiency, stable policy support, and alignment with tourism and economic development strategies that can gradually raise passenger demand.
Evaluating AirBorneo’s performance, he added, requires a balanced framework beyond short-term profitability.
“Operational indicators such as on-time performance, flight reliability, and safety compliance reflect whether the airline is functioning efficiently and building passenger trust.
“Demand indicators such as passenger load factors and traffic growth on core routes show whether the market is responding positively. Financial indicators including cost efficiency and revenue trends reveal whether the airline is moving toward sustainability, even if profits are not yet realised.
“Strategic indicators such as digital system readiness, network expansion capability, and integration with tourism and logistics initiatives indicate whether the airline is positioning itself for long-term relevance rather than short-term survival,” he said.
