AirBorneo


AirBorneo is a state-owned regional airline based in Sarawak, Malaysia. It was established following the Sarawak government’s acquisition of MASwings in January 2025 and commenced operations on 2 January 2026.
The airline operates Rural Air Services to remote communities across East Malaysia under a Public Service Obligation framework, continuing services previously provided by MASwings. Following the acquisition, AirBorneo is managed by the Sarawak government and relocated its headquarters from Kota Kinabalu, Sabah to Kuching, Sarawak. To ensure continuity of operations, the airline retained MASwings’ existing workforce and fleet, while the Federal Government continues to subsidised RAS services in both Sarawak and Sabah.
AirBorneo’s current fleet consists of turboprop aircraft, including the DHC-6-400 Twin Otter and ATR 72-500. The airline is evaluating potential regional commercial operations, including possible route expansion and the introduction of jet aircraft. Any such expansion is subject to regulatory approval, technical and economic assessment and amendments to its air operating licence.

History

Rural Air Services in Malaysian Borneo

The history of Rural Air Services in Malaysian Borneo dates back to 1953, when Sabah Airways became the first regional airline to provide air connectivity between remote areas of British Borneo. In 1955, the airline was renamed Borneo Airways, which continued to serve rural communities through its "Ulu Air Service" also known as "Rural and Inter-colony flights". The service was critical in connecting isolated regions of North Borneo and Sarawak with more developed urban centers.
In 1965, Borneo Airways merged with its parent company, Malaysian Airways, which later evolved into Malaysia–Singapore Airlines and eventually Malaysia Airline System. This merger facilitated the continuation and expansion of rural air services in Sabah and Sarawak, ensuring essential transportation links for remote communities and maintaining connectivity across East Malaysia's less accessible regions.
By the early 2000s, Malaysia Airlines was experiencing significant financial difficulties, partly due to the operational costs of maintaining RAS routes. The airline reported financial losses from these services, which were not economically viable due to low passenger volumes on many routes. More than 40 routes were deemed unprofitable, leading to a reliance on government subsidies. Prior to 2006, RAS operations were not subsidised, further complicating the airline's ability to maintain these routes.
File:Fly Asian Xpress Twin Otter MRD-1.jpg|thumb|left|FlyAsianXpress Twin Otter in 2007
In August 2006, the Malaysian government outsourced the operation of Rural Air Service to FlyAsianXpress, a subsidiary of AirAsia, aiming to enhance efficiency, reduce costs and improve connectivity for rural communities. Initially, FAX attracted attention with competitive fares and promotional offers, but the airline soon faced operational difficulties. Challenges such as maintenance issues and unreliable service led to frequent flight cancellations and passenger dissatisfaction.
To resolve these issues, Tony Fernandes, CEO of AirAsia, proposed on 11 April 2007 that the RAS routes operated by FAX be transferred to Firefly, a subsidiary of Malaysia Airlines, which had more experience managing turboprop operations. Following this recommendation, the Malaysian government announced on 26 April 2007 that Malaysia Airlines would resume control of the rural routes.

MASwings

2007–2012: Establishment and early years

MASwings was established on 1 October 2007 as a regional subsidiary of Malaysia Airlines. Its inaugural flight coincided with the anniversary of Malaysia Airlines founding in 1972. The creation of MASwings was part of Malaysia Airlines strategy to restore and expand air services in East Malaysia, following operational challenges faced by its predecessor, FlyAsianXpress.
MASwings was created to address these gaps in service and provide affordable and reliable air transport to rural areas in East Malaysia. The airline's mission was to enhance connectivity for isolated communities, which often had limited access to road transportation due to difficult terrain.
The airline began operations with a fleet of Fokker 50 and DHC-6 Twin Otter aircraft. These smaller planes were ideal for short-haul flights to regional airports with limited infrastructure. By the end of 2007, MASwings operated 450 weekly flights to 22 destinations across East Malaysia, including smaller towns and rural regions, marking the beginning of its service in improving connectivity in the region.
By 2009, MASwings began to broaden its operations, increasing flight frequency and expanding its route network. In December 2009, the airline announced plans to expand internationally, with destinations in the Philippines and Indonesia as part of its growth strategy. However, regulatory delays meant that MASwings initially focused on international routes within the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area.
In June 2010, MASwings expanded its international operations further within the BIMP-EAGA framework, which aimed to foster closer regional ties between Southeast Asian nations. This expansion resulted in the introduction of additional international routes, including flights between Kota Kinabalu and Bandar Seri Begawan, as well as between Kota Kinabalu and Puerto Princesa. Other new routes included services between Kuching and Pontianak, and between Tawau and Tarakan. By 2012, MASwings had officially commenced these services, helping strengthen its presence in the region.
During this period, MASwings also focused on modernising its fleet. The airline transitioned to ATR 72-500 aircraft, which were more fuel-efficient and better suited to the airline's regional operations. These turboprop aircraft, along with the DHC-6 Twin Otter, enabled MASwings to serve short-haul routes efficiently, particularly to smaller airports with limited facilities.

2012–2019: Growth and regional connectivity

Between 2012 and 2017, MASwings continued to solidify its position as a key regional carrier in East Malaysia, with an emphasis on providing air services to underserved rural areas. The airline's focus remained on supporting local tourism and connecting remote communities with urban centers, making it an essential part of the region's transport network.
MASwings' fleet of ATR 72-500 aircraft expanded, and the airline gradually increased its flight frequency. The airline continued to play a critical role in the BIMP-EAGA initiative, which fostered regional collaboration by improving connectivity between Brunei, Indonesia, Malaysia and the Philippines.
As part of the second phase of the BIMP-EAGA plan in 2012, the airline considered expanding to three new destinations: Makassar and Balikpapan in Indonesia, and Davao in the Philippines, with flights to Makassar and Davao routed through Tawau. Additional proposed routes included Manado in Indonesia, as well as Cebu and Zamboanga in the Philippines. In 2014, MASwings announced intentions to reposition itself as a low-cost carrier, with four leased jet aircraft to operate routes from Kota Kinabalu to several Chinese cities. However, these proposals were not implemented.
By 2017, MASwings had earned a reputation as a reliable air service provider to some of the most remote parts of Malaysia and its neighboring countries. Despite facing challenges in the international market that led to the closure of most of its international routes, MASwings maintained its core focus on domestic services, particularly in East Malaysia. This period saw the airline continuing to operate to destinations like Kota Kinabalu, Kuching, Miri and Labuan, along with its sole international route to Tarakan, Indonesia.
Between 2018 and 2019, MASwings achieved key milestones that reinforced its role in regional aviation. In 2018, the airline was recognized by the Malaysia Book of Records for its exceptional contributions to rural air services. It received awards for the "Longest Operating Hours for Rural Air Services" and the "Most Number of Passengers Transported via Rural Air Services," highlighting its important role in East Malaysia's economic and social development. These accolades underscored the airline's commitment to connecting remote communities and fostering local growth.
In 2019, MASwings entered into a new Public Service Obligation agreement with the Malaysian government to operate Rural Air Services across 40 routes in Sabah and Sarawak until 2024. This agreement included an annual subsidy of RM209 million to cover operational costs and maintain connectivity to underserved regions. The airline's fleet, comprising ATR 72-500 and DHC-6 Twin Otter aircraft, was well-suited for these short-haul flights to remote destinations.

2020–2023: Navigating pandemic challenges

The COVID-19 pandemic in 2020 significantly impacted MASwings, as the Movement Control Order led to flight suspensions and a sharp decline in passenger numbers. As restrictions eased in 2021, MASwings gradually resumed operations, although recovery was slow due to fluctuating demand and ongoing health concerns. Throughout this period, the airline continued to receive government subsidies.
By 2022, the airline experienced a significant recovery in both passenger traffic and cargo volumes after the challenges of the COVID-19 pandemic. Over the period from 2019 to 2022, MASwings successfully transported approximately 2.4 million passengers and handled more than 2,000 metric tonnes of cargo.
However, in 2022, MASwings permanently discontinued its sole remaining international route, operated using an ATR 72 aircraft, which connected Tawau in Malaysia to Tarakan in Indonesia. The service had been suspended for over two years during the pandemic, and despite market recovery, the airline determined that passenger volumes were insufficient to justify resuming the route. With this decision, MASwings shifted its focus exclusively to domestic operations.
In 2023, MASwings began taking steps to enhance its environmental sustainability. The airline announced plans to adopt sustainable aviation fuel derived from microalgae as part of its efforts to reduce its carbon footprint. This initiative was in line with the broader global shift in the aviation industry towards environmentally responsible practices, as airlines worldwide strive to lower their environmental impact. MASwings' adoption of SAF marked a significant step in its commitment to greener aviation practices.