THE restructured subsidy for rural air service (RAS) provider MASwings will be performance-based, said Transport Minister Anthony Loke today.

“Previously, when there were losses, the government still paid. But now, we will only pay incentives tied to performance,” he told a press conference in Putrajaya.

The ministry has inked an agreement with MASwings, a wholly owned subsidiary of Malaysia Airlines, for flights in Sabah and Sarawak from 2019 to 2024 following a review of RAS areas by the Malaysian Aviation Commission (Mavcom).

The RM190 million subsidy allocated for RAS routes will be based on the performance of the MASwings management and the handling of its finances, said Loke.

Penalties will be imposed if targets for service levels are not met, such as keeping to schedule and consumer satisfaction.

The agreement sees 10 routes removed, and the addition of the Limbang-Kuching, Long Lellang-Bario and Long Seridan-Bario routes, as well as cargo services from Miri to Bario, Ba’kelalan, Long Seridan, Long Lellang, Long Akah and Long Banga.

Another four destinations will be added, namely Long Pasia in Sabah, and Kapit/Bukit Mabong, Belaga and Long Silat in Sarawak.

Six former RAS routes – Kota Kinabalu to Sandakan, Tawau, and Miri, and Kuching to Miri, Sibu and Bintulu – will be opened to Malaysian Airlines, Malindo Air and AirAsia.

“These routes no longer fulfil the requirements of the Public Service Obligations, and no longer qualify as RAS routes under Act 771 (Section 2 of the Mavcom Act 2015),” said Loke.

He said the new Kota Kinablau to Sibu and Bintulu routes are exclusively for AirAsia.

“AirAsia is interested in servicing the two routes. So, we tie them down… the routes are exclusively AirAsia’s, and if they pull out, they must pay a fine.”

He said response has been positive, with prices starting from as low as RM69.

“The response is quite good. Between Kota Kinabalu and Sibu, the demand is from locals themselves.” – January 4, 2019.