With the impending General Election to be announced any time soon, Maybank Investment Bank is on the notion based on historic trend the GE15 is to have a long-term positive impact on passenger traffic and a short-term positive impact on airfares.
Maintaining a positive note on the sector with Malaysian Airports and Capital A as beneficiaries, MIB opines that the passenger traffic tends to rise during GEs. This is on the premise during GEs voters usually return to their voting constituencies to vote. For MAHB, domestic passenger traffic grew 18% in 2013 and 3% in 2018. For Capital A, AirAsia Malaysia passenger traffic grew 11% in both 2013 and 2018. MIB expects similar trends.
However, the bank also feels that the upcoming election will have less impact on the Malaysian aviation sector and may be less potent this time around. Reason is, voter turnout may not be as high as GE13 (80%) and GE14 (76%) due to a possible lack of State elections as three states have decided not to dissolve while the 3 on the north and east coast will also not be dissolving their state assembly.
Moreover, Sabah/Sarawak already held their state elections in Sep 2020/Dec 2021 respectively. There is also the issue of high fare prices, voters may be dissuaded. GE15 may favour Capital A more than MAHB To be sure, Maybank expects both to benefit from GE15.
