The company, previously known as SKS Airways Sdn Bhd, said evolving circumstances and complexities of the industry have made it untenable for them to continue operations.

“A key factor in this decision was the realisation that island-hopping operations using Twin Otter aircraft without government grants are not a viable business model,” it said in a statement.

Furthermore, it said, operating jet aircraft as a startup airline was equally challenging, contributing to the decision to shut down.

The company assured stakeholders that the winding-down process would be conducted “in an orderly manner”.

“We are committed to fulfilling our obligations, ensuring all outstanding financial commitments are fully settled, leaving no debts behind,” it said.

In October last year, the Civil Aviation Authority of Malaysia (CAAM) imposed a 90-day suspension on SKS Airways’s air operator’s certificate (AOC), almost a year after it ceased its cargo and passenger services in November of the previous year.

A CAAM spokesman confirmed reports of the suspension but did not disclose the reason.

The Johor Bahru-based airline, whose call sign is “Southern Tiger”, had obtained its AOC in 2021. At that time, it had a fleet of two DHC 6-300 Twin Otters.

The company, which operated out of the Sultan Abdul Aziz Shah Airport in Subang served the islands of Tioman, Redang and Pangkor.

Low demand led to the scrapping of flights to Pangkor in June 2022, while the issue of funding for new aircraft also grounded flights to Tioman and Redang in November 2023.

During the Langkawi International Maritime and Aerospace exhibition in May 2023, the airline was reported to have signed an agreement with Azorra Aviation to lease 10 Embraer E1952-E2 planes.

However, SKS Airways cancelled the leases in July 2024 after apparently failing to secure enough slots at Subang to support the expanded operations.