KUCHING: AirBorneo has the potential to grow significantly over the next five years, even reaching the same level as internationally renowned state-owned airlines such as Qatar Airways and Turkish Airlines.
According to Tourism, Creative Industry and Performing Arts Minister, Datuk Seri Abdul Karim Rahman Hamzah, like these airlines, AirBorneo is fully owned by the state.
“I am very confident. If we look at state-owned airlines like Qatar Airways, Emirates and Turkish Airlines, they have all performed exceptionally well.
“Even Singapore Airlines has thrived due to strong management, allowing them to generate profits, and award their employees up to seven months’ worth of bonuses,” he said at a press conference here.
He highlighted that any business venture, particularly in the airline industry, involves risks, as it requires substantial investment.
“There is always an element of risk.
“This is where calculated risk comes into play when venturing into any business, including the airline and transportation industries, which naturally have their challenges.
“But what gives us confidence in AirBorneo is its different business structure.
“Unlike other airline companies, which rely on investors, individuals and corporations to raise capital, AirBorneo is state-funded,” he added.
He said that the private airlines assess their performance yearly, determining their profitability over one, two or three years as profitability is the key factor in determining whether they expand their business or not.
“If they do not turn a profit within five years, they will not invest in new aircraft, on-board services, or in-flight meals, as everything depends on financial returns,” he said.
He emphasised that the most crucial aspect of AirBorneo’s success is ensuring it is managed with integrity and without misconduct.
“If those in charge of the airline are honest and committed to its growth, I believe it will flourish.
“Careful planning is essential. Funding is not an issue because the state is financially strong.
“However, that does not mean we should spend recklessly.
“There must be clear guidelines on investments, such as aircraft purchases, crew salaries and operational costs.
“We must not inflate wages simply because the airline is backed by the government,” he added.
