© Nikkei Markets
KUALA LUMPUR (Jan 04) — Malaysia’s federal government renewed a contract with MASwings, a regional airline operating rural air services, for six years to 2024, Transport Minister Anthony Loke, said Friday.
“The contract is renewed to provide rural flights in Sabah and Sarawak,” Loke said at a news conference in Putrajaya. “The government also budgeted 190 million ringgit ($45.88 million) a year to subsidize the flights.”
According to media reports, MASwings had earlier announced it will cease operations on eight domestic routes in Sabah and Sarawak, effective Jan. 1, 2019 following the finance ministry’s decision to cut funding under new Public Service Obligation agreement.
Now the number of subsidized routes has been cut to 39 from 49, Loke added.
Loke also said penalty will be imposed on MASwings if its services are not up to par.
Meanwhile, the ministry also inked a pact with AirAsia to operate two exclusive routes in Sabah and Sarawak: Kota Kinabalu-Sibu and Kota Kinabalu-Bintulu.
Separately, Loke said the ministry paid 23 million ringgit as compensation to 961 former staff of the disbanded Land Public Transport Commission and has helped 70%-to-80% of those to secure job offers from government agencies and state-linked companies.
– By Gan Pei Ling
– Edited by Sayantika Bhowal