AirBorneo to look into fuel supply contracts with oil companies

Sarawak transport minister Lee Kim Shin says such an arrangement will lower the airline's operating costs.

AirBorneo officially took to the skies on Jan 1 after AirBorneo Holdings Sdn Bhd completed the acquisition of MASwings Sdn Bhd. (Bernama pic)

PETALING JAYA:

 The Sarawak government is looking into contracts or memoranda of understanding with oil companies in a bid to lower state-owned AirBorneo’s operating costs.

Sarawak transport minister Lee Kim Shin said fuel is one of the largest cost components in airline operations, The Borneo Post reported.

“Yes, certainly,” he was quoted as saying when asked if the airline plans to enter into an agreement with either national oil company Petronas or Sarawak-owned oil and gas company Petroleum Sarawak Bhd.

“We will study what is in the best interests of AirBorneo and the best options available.”

Lee also said the state was looking into a subsidy model for rural air services.

The acquisition of MASwings Sdn Bhd through AirBorneo Holdings Sdn Bhd was completed yesterday and took effect immediately.

The sale and purchase agreement for the acquisition was signed between Malaysia Aviation Group and the state government in February last year. - FMT