The announcement of a RM599 price cap is sure to be wildly popular with anyone booking festive season flights to East Malaysia.

Well, Merry Christmas from the government!

Transport Minister Anthony Loke Siew Fook has unveiled a surprising initiative aimed at tackling the perennial problem of soaring flight prices during festive seasons – something many economists might characterise as “supply and demand.”

Commencing this Christmas, travellers bound for East Malaysia from the Peninsula will enjoy significant relief with a price cap of RM599 on one-way economy class flight tickets.

This maximum fare specifically applies to flights from West Malaysia to Sabah, Sarawak, and Labuan on December 22, 23, and 24. In cases where ticket prices exceed RM599 (excluding taxes and fees), the government will subsidize the difference.

This subsidy is no small gift, either. A quick check today on Malaysia Airlines found that a one-way flight to Kota Kinabalu on December 22 is priced at a jaw-dropping RM1,839.44 for the cheapest tier (“economy lite”). Passengers who want the economy flex version will need to pay a bit more.

Lest you think the lion’s share of that ticket price comprises taxes and fees that would not be covered by the subsidy, nope… the base fare is a whopping RM1,712.00. The remaining RM127.44 includes taxes, fees, and a small fuel surcharge (RM12.00).

That means the government will be picking up the tab for over RM1,100 on this particular ticket.

It was unclear whether the subsidies would cover any economy class ticket or only the cheapest tier of economy class tickets. Also worth questioning, wouldn’t most passengers angle to get flights on the best airline at the most ideal departure time, since all cost considerations have effectively been removed?

Those questions notwithstanding, Loke did point out that this airfare subsidy framework will extend to other festive seasons, including Chinese New Year, Aidilfitri, Kaamatan, and Gawai in the upcoming year.

“This is a seasonal issue. Every season, this problem arises. Ticket prices are consistently high, reaching thousands of ringgit. Therefore, we are taking concrete steps to address this issue once and for all,” he declared at a press conference.

For now, from December 16 onward, travellers can avail themselves of Christmas flight tickets under this new policy. For other festive seasons in 2024, ticket sales will commence from January 1, 2024.

Loke highlighted the participation of major airlines, including AirAsia, Firefly, Malaysia Airlines, and Batik Air. It’s crucial for travelers to note that date and name changes are not allowed, and tickets purchased under this scheme are non-refundable, he added.

No word on whether this latest subsidy from the government would be available to everyone, or set for eventual targeting to exclude wealthier households, as is the 2024 plan with some other subsidies.