SKS Airways, a Malaysian airline, has sought funding from the Middle East for the lease of 10 Embraer E195-E2 aircraft from Azzora Aviation Holdings. The airline reportedly approached two major airlines in Dubai and Jeddah to invest by acquiring a stake in the financially struggling carrier. It is also believed to have requested funds from Malaysia Aviation Group (MAG), but MAG and the two Middle Eastern airlines are not interested in investing.
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The current issue facing SKS Airways is the monthly payment for the pre-delivery commitments for the 10 E195-E2 aircraft, which are the most expensive type compared to other E-jets models such as the E190, E175, and E170. The lease agreement requires a certain amount of security deposit to be paid to the lessor every month. The lease value, including maintenance and other expenses for an aircraft, is about US$350,000 to US$400,000 per aircraft. For 10 aircraft, the airline would have to pay between US$3.5 million to US$4 million per month.
The challenge for SKS Airways and other airlines in Malaysia is that the income is in ringgit while most of the operational expenses, including jet fuel, maintenance, and lease, are in US dollars. The Malaysian currency has been depreciating against the dollar over the last few months. Despite its ambitious plan to start a premium regional jet service out of Sultan Abdul Aziz Shah (SAAS) airport, SKS Airways might not have considered the currency mismatch between the ringgit and the US dollar. The announcement of SKS Airways' regional jet plan coincides with the Subang Airport Regeneration Plan (SARP) announcement. Narrowbody airplanes will also be allowed to fly out of Subang Airport again.
The ground-breaking of the SARP project is expected to be in 2025 when the terminal would be expanded to cater to five million passengers per year by 2027 and eight million by 2031. Currently, Subang Airport is handling 1.5 million passengers every year. Transport Minister Anthony Loke had repeatedly said the SARP would not cannibalize Kuala Lumpur International Airport by taking away passenger traffic from the latter. Loke declined to comment on SKS Airways when asked during a press conference at the launch of MAG's first Boeing B737 MAX 8 aircraft.
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