The Malaysian government has given approval to AirAsia Group Bhd to operate flights from Kota Kinabalu to Sibu and Bintulu.
"The Cabinet approved last week to take out these two sectors from Rural Air Services (RAS) agreement," said Transport Minister Anthony Loke today.
He added that this should save the government some RM20 million to RM30 million from the RM230 million allocated for subsidies under the RAS agreement in 2020.
Under the agreement, the government subsidised MASwings to operate rural flights including those from Kota Kinabalu to Sibu and Bintulu.
AirAsia group chief executive officer Tony Fernandes said the group has been trying to secure these routes for nine years, the longest time it has ever spent applying for routes.
Separately, Loke called on the Malaysian Aviation Commission (Mavcom) not to over regulate commercial airlines.
"If there are any airlines that want to increase the frequency (of their flights), our role should be to facilitate that," Loke told reporters at the launch of new flights by AirAsia today.
AirAsia announced new late night flights for the Chinese New Year festive season from Kuala Lumpur to Penang, Kuching, Miri, Sibu and Kota Kinabalu, and vice versa.
According to Fernandes, the additional flights will add 43,500 seats on top of 25,000 existing seats.
The fares for these late flights are fixed at RM99 one-way from KL to Penang, RM149 from KL to Miri, Sibu and Kuching, as well as RM199 from KL to Kota Kinabalu.
At 12.22pm, AirAsia Group shares fell 1.93% or 6 sen to RM3.05 with 5.66 million shares traded.