House of Representatives: New RAS AirBorneo agreement expected to be signed by the end of this year

KUALA LUMPUR, 12 Oct: A new RAS Agreement between the Federal Government and AirBorneo is expected to be signed later this year to ensure continuity of air services to rural areas in Sarawak, Sabah and Labuan Federal Territory.

Deputy Minister of Transport, Datuk Hasbi Habibollah said the agreement is currently in the process of ratification to replace the Interim RAS Agreement which expires on 31 December 2026.

According to him, the Federal Government also provided an annual subsidy of RM209 million to AirBorneo to cover the overall operating costs of the outbound services.

"The Federal Government has signed the Interim Agreement for Outdoor Air Services (RAS) with AirBorneo on 18 December 2025 and will expire on 31 December 2026.

"The new RAS agreement is being finalized and expected to be signed by the end of this year", he said.

He said so in a written reply to Datuk Larry Sng Wei Shien (Malaysia Nation Party-Jule) on the frequency of AirBorneo flights as well as the government's measures to ensure adequate flight capacity and affordability, especially for rural and rural Sarawak residents, in the Dewan Rakyat today.

Commenting further, Hasbi said that a total of 39 RAS routes are currently subject to the ceiling price mechanism with base mining rates ranging from RM30 to RM243, depending on the route.

Clearly, the rates do not include taxes, airport charges and fuel surcharges, while AirBorneo as an RAS operator under the Public Service Obligation (PSO) framework is legally obliged not to raise the base mine above the fixed ceiling price.

"The Malaysian Civil Aviation Authority (CAAM) will continue to monitor compliance with RAS operations, as well as carry out periodic reassessments of the ceiling pricing structure to ensure mines remain reasonable and affordable", he said.