AirBorneo targets 15 aircraft fleet to reach profitability

KUCHING: AirBorneo Airways Sdn Bhd anticipates expanding its fleet to 14 to 15 aircraft to attain the scale necessary for commercial profitability, according to the Sarawak government-owned carrier. CEO Megat Ardian Aminuddin explained that a smaller operation, consisting of two, five or seven aircraft, would not yield sufficient scale for the airline.

The ideal fleet size, he stated, would likely be around 14 to 15 aircraft, reported Business Times. AirBorneo aims to operate 17 jet aircraft by the conclusion of 2030. The airline commenced its jet operation in July 2026, offering services between Kuching, Kuala Lumpur, and Singapore. Megat indicated that a more extensive fleet would enable AirBorneo to introduce more frequencies, launch new destinations, and broaden its trunk routes while distributing fixed costs across a wider operation.

As passenger numbers increase, revenue follows suit, which is when scale begins to manifest; revenue surpasses fixed costs, allowing them to be spread across a larger operation, he explained. AirBorneo's timeline for profitability hinges on when the aircraft enter service, passenger demand, fuel prices, and other market dynamics.

The airline's fleet plan initially involves wet-leased Boeing 737-800s, with the introduction of dry-leased aircraft anticipated in 2028. Megat emphasized that state ownership and a network tailored to Sarawak's connectivity needs distinguish AirBorneo from other airline start-ups. He highlighted two key differences: firstly, the airline is state-owned, and secondly, the Sarawak government has allocated funding for working capital, operating expenditure, and capital expenditure under its approved business plan.

AirBorneo assumed full legal and operational responsibility for services previously managed by Malaysia Aviation Group subsidiary MASwings on January 1, 2026. This transferred operation encompasses Rural Air Services in Sarawak, Sabah, and Labuan, and AirBorneo is constructing a regional jet network from Kuching. The airline's network aims to facilitate travel by Sarawakians and attract visitors to the state for tourism, investment, business, medical tourism, and education, Megat stated.

Fuel remains a concern for the airline, but the airline's budget accommodates manageable fuel costs for the turboprop operation. AirBorneo plans to adopt a phased approach to fuel hedging once it reaches sufficient scale to determine required volumes and commit to longer-term contracts. Fuel hedging aims to provide greater stability and predictability in the airline's planning rather than solely reducing costs, Megat added.