“The sweet spot is probably around 14 to 15 aircraft,” Chief Executive Officer Megat Ardian Aminuddin said, adding that a smaller operation with two, five or seven aircraft would not provide sufficient scale, as reported by the Malaysian newspaper Business Times.
AirBorneo plans to operate 17 jet aircraft by the end of 2030. The airline began jet operations in July, with services connecting Kuching with Kuala Lumpur and Singapore.
Megat said a larger fleet would enable AirBorneo to increase frequencies, launch new destinations and expand its trunk routes while distributing fixed costs across a broader operation.
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An aircraft of AirBorneo Airways. Photo courtesy of the company |
“The more passengers you carry, the more revenue you generate. That is when scale starts to come in; your revenue exceeds your fixed costs and those costs can be spread across a larger operation,” he said.
He said the timeline for AirBorneo to become profitable would depend on when the aircraft enter service, as well as passenger demand, fuel prices and other market conditions.
Under its fleet plan, the airline will initially operate wet-leased Boeing 737-800s before introducing dry-leased aircraft from 2028.
Sarawak is Malaysia’s largest state by land area, located on the island of Borneo. It is known for its extensive rainforests, rich biodiversity, natural resources and diverse population.
Megat said state ownership and a network developed around Sarawak’s connectivity requirements set AirBorneo apart from other airline start-ups.
“There are two main differences. Number one, we are state-owned,” he said, adding that the Sarawak government had allocated funding for the airline’s working capital, operating expenditure and capital expenditure under its approved business plan.
“Above all, AirBorneo is the realization of the state’s vision. The state has allocated the working capital, operational expenditure and capital expenditure for the next few years, so the funding has already been provided for,” he said.
AirBorneo assumed full legal and operational responsibility for services previously operated by Malaysia Aviation Group subsidiary MASwings on Jan. 1, according to The Edge Malaysia.
The transferred operation includes Rural Air Services across Sarawak, Sabah and Labuan, while AirBorneo is developing a regional jet network from Kuching, Sarawak’s capital and largest city.
Megat said the airline’s network was designed to support travel by Sarawakians and bring visitors into the state for tourism, investment, business, medical tourism and education.
There are six commercial passenger airlines active in Malaysia: AirAsia, AirAsia X, Firefly, Malaysia Airlines, Batik Air and AirBorneo, according to the Civil Aviation Authority of Malaysia.