KUCHING: Aviation experts have warned that Sarawak’s yet-to-be named boutique airline will face significant challenges on entering the market.
Mooted by Premier Datuk Patinggi Abang Johari Tun Openg the boutique airline is seen as Sarawak’s answer to mitigate exorbitant airfares of existing carriers especially during peak travel periods and, also to, ultimately give the state greater reach to the wider market.
But its business model, aircraft type and destinations have yet to be announced and herein lies the challenges, according to the experts.
Henry Sia, a Sarawak-born, Australian citizen with 29 years of experience in the aviation industry, shared his thoughts with the New Sarawak Tribune.
“The market is not only very soft currently, it’s small and very crowded,” he said.
“It’s a small guy attempting to compete against larger and stronger opponents.”
He noted that the airline would have to compete with established carriers such as Malaysia Airline (MAS), Royal Brunei Airlines (RBA), Bek Air, low-cost airlines AirAsia, Firefly, MyAirline, Malindo, Batik Air and Scoot, which all operate flights in and out of Kuching.
Sia stressed that the state airline must expand beyond the local market to remain sustainable.
“It’s a small market. It would have to attract the foreign market too,” he explained.
“It’ll need to fly passengers locally, then on to various other Asean destinations.”
To succeed, Sia reiterated that the boutique airline must keep its cost base minimal while maintaining competitiveness in terms of service delivery and costs.
Additionally, the airline must offer a far more superior product than what competitors like MAS, AirAsia, Scoot and other airlines currently provide.
He also highlighted the importance of conducting a feasibility study to assess public preferences regarding in-flight service offerings, as these will impact operational costs.
“Airlines have found it very tough to lure foreign tourists to Sarawak,” noted Sia.
“Even when MAS was operating direct flights from Kuching to Perth, the demand was limited. I remember being the only passenger on one of the flights back home. It’s no surprise that the route was eventually discontinued.”
While details are scarce, Sia said one potential advantage is the lack of direct flights from Asean countries to Kuching, apart from Singapore’s Scoot airline.
Abang Johari has previously stated that the new airline, with its hub in Kuching, plans to fly to cities like Singapore, Bangkok, Jakarta, Manila, and selected Asean cities, as well as destinations in southern China, Japan and South Korea.
Despite the challenges, Sia remained hopeful about the airline’s potential, but cautioned that it will need to offer competitive fares and high-quality service to attract budget-conscious travellers.
Dr. Rosli Khan, a veteran with 30 years in the industry, said the current demand primarily requires a simple, affordable, safe, and convenient mode of transportation, similar to a bus service.
He stressed that the market does not need an elaborate full-service or boutique airline, as these cater to a niche segment of affluent business and leisure travellers.
“Boutique airlines offer customised services tailored to their clients’ preferences, such as flexible departure times, specialised food and beverage options, small group travel, and a level of service approaching that of a private aircraft,” Rosli explained.
Such airlines tend to exclude mass-market or low-income travellers, as their offerings are often priced beyond their reach.
“Boutique airlines primarily cater to affluent and high-profile clients, making their market niche and highly exclusive.”
He also pointed out that the cost of operating boutique airlines is high, with limited growth potential.
Another expert, Eldred Ong, an airline pilot and flight instructor with over 40 years of experience, advised that Sarawak’s new boutique airline should start small and focus on long haul routes of four to five hours to increase its chances of profitability.
“Starting an airline is not cheap,” said the former Singapore Airlines (SIA) A380 pilot.
According to him, the long haul routes like Mumbai in India, China, Japan and South Korea are the key to profitability in the airline industry.
“At the end of the day, it’s the long haul routes that make money,” said Ong.
“Flying to distant destinations allows airlines to charge higher fares, and to attract customers who are willing to pay a premium for comfort and convenience.”
Despite the potential for profits on long haul routes, many airlines in this region are focused primarily on China.
“They see the China tourism market as the biggest and everyone wants a slice of it,” noted Ong.
However, he added that airlines that are able to diversify their routes and appeal to a wider range of travellers may be better positioned for success in the long term.
Ong’s comments come amid discussions on the airline’s optimal size and fleet composition.
Abang Johari has revealed that the airline will initially have four aircraft.
Tan Sri Datuk Amar Abdul Aziz Dato Husain, chairman of Hornbill Skyways – the company leading the consortium investing in the airline – prefers turboprop aircraft, while the Premier favours medium-sized jets that can carry 120 to 150 passengers.
Ong, however, advised against turboprop planes, arguing that they would be unpopular with travellers.
“Definitely not turboprops. That’ll be a total failure,” he said.
Instead, Ong suggested an A320-sized aircraft if the state is funding the airline. Commercial jets that meet the requirements include the Brazilian-made Embraer E2 series, Airbus A220 series, and the Boeing 737 family, which are capable of making the four to five-hour flight range.
Despite the potential advantages of starting small, Ong warned of scheduling challenges with a fleet of just four aircraft.
He explained that busy airports, such as Narita, may provide unfavourable flight slots for airlines with few planes and low frequency.
“Once you’ve low frequency, the choices go down. You’ll need to have daily frequency to target a wider market segment. Then only, will there be more choices,” Ong said.
He added that the airline’s ticketing agents may encounter challenges in selling the airline’s services due to the constraints they will face.
The Premier has stated that the new airline will take to the sky within the next three years.
