WHILE future trends indicate potential increase in domestic travel as the nation moves closer to reaching herd immunity and travel restrictions are relaxed for fully vaccinated passengers, the recovery rate of the aviation sector remains uncertain.
This follows the latest 2021 passenger traffic forecast by the Malaysian Aviation Commission (MAVCOM) which now expects passenger traffic to contract by between 77% year-on-year (yoy) and 80.2% yoy (between 5.3 million and 6.1 million passengers) which is significantly lower than its previous projection of 18.9 million to 20.6 million passengers in April 2021.
Following the implementation of the movement control orders (MCOs) between 4Q 2020 and 2Q 2021, MAVCOM reported that total passenger traffic in 2Q 2021 stood at 1.3 million, the lowest it has been since 2Q 2020 which saw 800,000 passengers.
This represents a growth of 62% year-on-year (yoy) due to a low base effect.
Despite the drop in passenger traffic, an increase in domestic, short-haul travel is anticipated with the relaxation of movement restrictions for fully vaccinated passengers.
“The aviation industry continues to be the hardest hit by the COVID-19 pandemic.
“Beyond the pandemic, MAVCOM is working hard, in consultation with industry players, to prepare for the jumpstart of the aviation sector,” commented MAVCOM’s executive chairman Datuk Seri Saripuddin Kasim.
“Nonetheless, it is crucial for all stakeholders to be prepared for a new market that will be dominated by price-sensitive leisure travellers.
“In light of this, the commission expects cost containment and reduction to become top priorities for airlines as well as airport operators.”
While muted passenger traffic numbers persist, the commission highlighted that Malaysia’s total cargo volume expanded by 80.4% yoy in 2Q 2021 due to high demand for vaccines, medical equipment, personal protective equipment, electrical and electronic (E&E) components as well as the solid growth seen in e-commerce.
MAVCOM anticipates air cargo traffic in 2021 to expand by between 26.5% yoy and 28.2% yoy, hence recovering to pre-crisis levels.
Despite the ongoing pandemic, MAVCOM also reported that Malaysia’s main cargo players have undertaken route expansions that may indicate a further increase in Malaysia’s cargo volume in the near future.
In this regard, Raya Airways and World Cargo Airline (WCA) have both upgraded their licences from Air Service Permits (ASPs) to Air Service Licences (ASLs).
As of June 30, MAVCOM approved 100% of the 34 Air Traffic Rights (ATR) applications received in 1H 2021, reflecting an increase of 25.9% yoy compared to the 27 ATR applications in 1H 2020.
International routes received 26 ATR allocations with the largest share of ATR in 1H 2021 allocated for routes to China at 38.2%. This was followed by allocations to domestic routes and the ASEAN region at 23.5%.
1H 2021 also marked the second consecutive half without expiry of any airline’s ATR portfolio following MAVCOM’s decision to ease the condition which automatically revokes un-utilised ATRs within six months from the date of the ATR approval. – Oct 25, 2021
Pic credit: The Malaysian Reserve
