MIDF Projects A 2% Growth In Air Passenger Traffic From 2019 Levels

Passenger traffic at Malaysia’s airports reached 7.6m pax in Apr-24. This reflects an 86% recovery (domestic: 85%, international: 88%). Notably, for the past six months, the international sector has consistently outpaced the domestic sector in terms of recovery. This trend has been bolstered by ASEAN travel, boasting a 91% recovery rate, while non-ASEAN travel stands at a slightly lower 85%.

MIDF noted both the international and domestic sectors were notably fueled by the Aidilfitri celebration from the second week of April. Leveraging the visa-free waiver, airlines continued to concentrate on expanding seat capacity to these nations. During the month, AirAsia introduced a new scheduled flight from KUL to Jaipur four times a week, alongside the reinstatement of flights to Visakhapatnam thrice weekly. Furthermore, Cambodia Airways commenced thrice-weekly services to KUL from Phnom Penh.

Under the guidance of Malaysia Airports Holdings Berhad (MAHB), approximately 14 new carriers are set to commence services to KUL within the next two years. Among them, an estimated 5 carriers have already initiated operations in 1QCY24. This catalyses the recovery of international traffic, particularly with the expected arrival of airlines such as British Airways, Qantas, Air India, Lufthansa, Iberia, and Finnair in the coming quarters. Their entry is expected to further stimulate non-ASEAN travel. However, the house said it cautiously evaluates the recovery of the domestic sector, acknowledging that it has remained within the range of 80% to 85% in recent months, averaging 83% in 4MCY24. This is likely linked to limited aircraft availability, which consequently restricts seat capacity growth.

MIDF maintains NEUTRAL on the sector and keeps its traffic projections unchanged, indicating a +2.0% growth compared to 2019 levels, which aligns with MAVCOM’s higher-range forecast. The house anticipates further guidance from MAHB regarding the achievability of these projections, with its results briefing scheduled for next week. However, notable downside risks include potential delays in AirAsia’s full fleet reactivation and disruptions in Boeing aircraft deliveries to local airlines

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