KUCHING: AirBorneo Airways Sdn Bhd will rationalise selected rural air services (RAS) frequencies as part of efforts to improve reliability and aircraft serviceability, chief executive officer Megat Ardian Aminuddin said.

He said the airline was focusing on operational resiliency, maintenance support, network rationalisation and long-term fleet renewal after taking over the RAS operation from MASwings Sdn Bhd on Jan 1, 2026.

AirBorneo currently operates 14 dedicated turboprop aircraft for RAS, comprising eight ATR 72-500 aircraft and six Twin Otters.

The aircraft serve intra-Sarawak, intra-Sabah and Labuan routes connecting rural communities under the public service obligation network.

Megat Ardian said there had been disruptions in the RAS network and AirBorneo is working with maintenance providers and spare parts suppliers to improve aircraft turnaround.

He said the airline was focusing on faster spare parts transfer, deploying the right technical resources to where aircraft are located, improving turnaround during checks and repairs, and engaging new suppliers.

"It is about the speed of fixing things. It is about the speed of getting the aircraft back into the schedule," he said during a media briefing here today.

Megat Ardian said AirBorneo was also reviewing its RAS network by merging some low-load frequencies while protecting high demand services.

He said the move would allow the airline to allocate more time for aircraft serviceability.

"Network rationalisation where we are trying to allocate more time for service. That is where we are merging some flights, rationalising the network and cutting some frequencies on flights that have low loads."

"Sometimes out of 70 or 68 seats, sometimes only half get filled. Sometimes on our Twin Otters, we have nine seats, only two get filled. So some of these we have to rationalise, we have to merge them," he said.

Megat Ardian said high-demand frequencies would be maintained.

"We keep and we protect the high demand frequencies. High demand flights are always there.

"That is where we have sometimes 75 per cent load factors. Those are the flights that we keep. We do not touch those," he said.

He added that AirBorneo would announce a revised RAS schedule in the coming days after finalising details with the Transport Ministry.

"It will not close, but it will reduce," he said, adding that some routes could be merged from 14 times weekly to seven times weekly depending on demand.

Megat Ardian said AirBorneo carried about 60,000 to 70,000 RAS passengers per month from January and was targeting about 850,000 passengers annually.

He said the RAS operation was not only about tourism, but also essential connectivity for local communities in the interior.

"Because RAS is a social obligation, it is not just about tourism. It is about connecting cities to the interior as well, connecting transport for local communities there," he said.

Megat Ardian said the RM209 million annual subsidy from the federal government was specifically for RAS and did not cover AirBorneo's commercial jet operations.

"Yes, those subsidies are there, but those subsidies are specifically and only for the Rural Air Services. The jet operations are completely separate," he said.

He said AirBorneo was also discussing network rationalisation with the federal government with a new agreement expected to be finalised by the end of the year.

As part of its long-term RAS fleet renewal, AirBorneo has signed for eight new ATR 72-600s in February this year.

Megat Ardian said two aircraft would be delivered in 2027, four in 2028 and the remaining two in 2029.

He said the new ATR 72-600s would replace the existing ATR 72-500s on a one-for-one basis.

The airline is also starting commercial jet operations this month with two wet-leased Boeing B737-800s, beginning with the Kuching-Kuala Lumpur route.

Megat Ardian said starting with two aircraft would allow AirBorneo to maintain cost discipline and scale up gradually as more aircraft joined the fleet.

"Starting with two aircraft gives us a controlled growth trajectory. We start with two instead of starting with five or seven. With two, we can be very disciplined on cost," he said.

He said the airline would grow to five aircraft by the end of 2027, before adding one aircraft every quarter from 2028.

Megat Ardian said AirBorneo planned to move progressively from wet-leased aircraft to dry lease or financial lease aircraft from 2028, which would lower its cost base.

He said the airline was targeting 17 dry-leased aircraft by the end of its five-year fleet plan.

AirBorneo is also looking at cargo as an ancillary revenue stream as its jet fleet expands.

Megat Ardian said the airline did not plan to operate dedicated freighters, but would use belly cargo space on its passenger aircraft.

"Cargo is not a cargo operation per se. We will not have our own cargo aircraft. It is all belly space," he said.

He said AirBorneo would work with multiple cargo general sales agents instead of relying on one cargo player.

"Sarawak is a big region, and it can move cargo back and forth, not just to Peninsular Malaysia, but also to some international destinations. Cargo, yes, is a very important ancillary revenue for us to put forward," he said.

AirBorneo will also begin with interline partnerships before moving into deeper cooperation such as codeshares and, eventually, possible alliance membership.

He said the airline had already received interest from other airlines for interline and codeshare cooperation.

"We always will start off with interline first, and then progressively from the interline we work on some other deeper partnerships, which is codeshare. Then from codeshare also, we go up another level to joining an alliance," he said.

Megat Ardian said alliance membership would take time and could come at a later stage, possibly from year three to year five onwards, depending on AirBorneo's network, reliability and passenger profile.

He said other airlines would first want to see AirBorneo's operational performance, loads and service reliability.

"We may start interline as early as quarter four this year or quarter one next year," he said.

On profitability, Megat Ardian said the airline industry required scale, and AirBorneo would need more aircraft, passengers and network depth before achieving stronger cost efficiency.

"The airline industry is about scale. It is really about scale. With two aircraft, with five aircraft, even with seven aircraft, you do not get that much scale this year," he said.

Megat Ardian said AirBorneo would see more scale when its fleet reached the teens.

"I am not saying that we only break even when we are at 13 or 14 aircraft, but I am saying that is where we see a lot more scale and a lot more cost reduction as well," he said.