MASwings will cease operations for six routes in Sabah and Sarawak by next year to make way for commercial airlines, said Datuk Seri Liow Tiong Lai.
The Transport Minister said this was decided after a study by the Malaysian Aviation Commission (Mavcom) was done on rural air services (RAS).
It found that the six existing routes, jointly operated by MASwings with commercial airlines like Malaysia Airlines and AirAsia, had a high load factor of up to 86%, making it more profitable for commercial airlines.
The routes are Kota Kinabalu - Sandakan, Kota Kinabalu - Tawau, Kota Kinabalu - Miri, Kuching - Miri, Kuching - Kota Kinabalu, and Kuching - Sibu.
"By next year, MASwings will stop the six routes because we have opened them up to commercial flights and MASwings cannot sustain its operations.
"The Government is ready to consider applications by commercial airlines to operate RAS, subject to conditions, but if we open up the RAS to commercial airlines, we cannot subsidise MASwings anymore," he said in reply to questions by Alice Lau (DAP - Lanang) and Julian Tan (DAP - Stampin) in the Dewan Rakyat on Wednesday (Nov 8).
AirAsia had previously applied to conduct rural air services in East Malaysia, but Liow said the routes applied for had little potential as viable commercial routes due to a low load factor, meaning there were fewer passengers.
"It is likely that if we allow commercial airlines to operate these routes, they may cease operations after a while when they do not make enough profit.
"That is why we demanded AirAsia to give us a five-year guarantee because we need to be able to guarantee the people of Sabah and Sarawak that they will have continued flights to these destinations if MASwings no longer caters to them," he said.
For the time being, MASwings operates rural air services in East Malaysia almost exclusively, with RM160mil annual subsidies provided by the Government to cover operations and plane costs.