By the way, I was wondering why did the government handover RAS to FAX in the first place, when they know that they’ve to give out higher subsidies? That is immediately a turn-down in business sense.

I’d like to take this opportunity to comment on this conversation, and to help clarify the situation revolving around the Kota Kinabalu-Sibu route. The Kota Kinabalu-Sibu route is exclusive to the operator of Rural Air Services (RAS) because AirAsia had in fact requested for routes exclusivity when its subsidiary, FAX operated the RAS.

This took place during the domestic rationalisation exercise of March 2006, and AirAsia demanded for exclusive rights to almost all of the air routes within and intra Sabah and Sarawak, which naturally included the Kota Kinabalu-Sibu route. Only AirAsia’s subsidiary, FAX had the exclusive rights to ply these routes.

Therefore, we were following the RAS Agreement that is in place, and allegations of us forcing AirAsia out of the KK-Sibu route is in fact untrue. In addition, it should also be pointed out that AirAsia is bound by the RAS Agreement and as such, cannot fly these routes, which is only afforded to FAX.

Perhaps a little more history behind what actually took place: AirAsia, through FAX, took over RAS from MAS in 2006, and received higher subsidies as compared to MASwings for the same scope of air services. However, AirAsia quickly surrendered (13 months) RAS back to Malaysia Airlines when they realised how unprofitable the routes were. Is this a case of cherry picking and choosing only to operate on profitable routes? I leave it to your kind selves to make your own conclusion.

Regardless of how this is perceived, it is clear that loss of taxpayer’s money is involved here. As many of you may know, we cross subsidise profitable routes (such as the KK-Sibu route) with other unprofitable routes. By doing this, we in fact help save taxpayer’s money, as MASwings’ P&L is born by the government. There is also the untold story of job loss, as we were forced to retrench hundreds of long serving staff in Sabah and Sarawak under a Mutual Seperation Scheme, due to the initial handover handover in 2006.

Lastly, it is also noteworthy to mention that MAS handed over seven Fokker 50 as well as five Twin Otter aircraft to FAX, all of which were in excellent flying condition. When MASwings resumed RAS operations in 2007, 50% of the Fokker 50 aircraft and almost all of the Twin Otter aircraft were not airworthy. As a result, we spent an additional RM36 million to restore these aircraft back to operational conditions.

I hope that with this, you have a clearer picture of what has transpired, and will help everyone to better understand the situation with the facts in hand.

Thank you.

Encik Mohd Salleh Tabrani
Managing Director
MASwings