PETALING JAYA: Putrajaya has agreed to extend the interim subsidy for rural air services in Sabah and Sarawak for another year, says transport minister Loke Siew Fook.
Loke said the Cabinet agreed to this as negotiations on the MASwings airline takeover, involving the Sarawak government, Khazanah Nasional Bhd and the Malaysia Aviation Group, are still going on.
"Once the MASwings takeover is completed, the government plans to negotiate a long-term deal for rural air services," he was quoted as saying in a Dayak Daily report.
"In principle, the federal government has no issue with continuing the subsidy worth RM209 million a year for rural air services. That is our commitment."
The current agreement, which covers five years from Jan 1, 2019, will expire on Dec 31, 2024.
Sarawak premier Abang Johari Openg was reported in October last year as saying he expected the acquisition of MASwings to be concluded within three months so that Sarawakians could fly with a state-owned airline by 2024.
In March this year, however, he said the state government was expected to finalise discussions with federal authorities on the takeover by the end of this year.
Rural air services in Sarawak have been in existence since the early 1950s, being operated by Borneo Airways, Malaysia Airlines, FlyAsianXpress, and MASwings since 2007.
For the rural air services, MASwings operates six Twin Otter short take-off and landing aircraft which can operate from rural airfields. The airline also operates 10 ATR 72-500 turboprop aircraft on short-haul regional routes.
