Air passenger traffic set to grow 6% in 2020

KUALA LUMPUR: The country’s air passenger traffic is expected to grow by 5%-6% next year, driven by Visit Malaysia 2020 and a 3.2% year-on-year (yoy) increase in domestic seat capacity growth, the Malaysian Aviation Commission (Mavcom) said on Dec 10.

This will bring the total traffic figure to between 114.9 million and 116.0 million passengers, the regulator said.

“The forecast growth in 2020 follows Mavcom’s revised 2019 passenger traffic forecast to between 109.1 million and 109.7 million, being a growth of 6.4%-7.0% yoy,” it said in a statement.

Mavcom had earlier projected only a 2.9%-4.1% growth yoy for 2019. Actual traffic for the first half (1H) of this year jumped 5.2% yoy to 53.1 million.

The projected growth was published in Mavcom’s fifth bi-annual industry report, Waypoint, which gives an overview of the Malaysian aviation sector’s performance for 1H 2019 as well as prospects for 2020.

In 1H 2019, Malaysia’s tourist arrivals by air grew 8.8% yoy to 4.8 million, higher than the growth recorded for total tourist arrivals by all modes of transport of 4.9% yoy, which resulted in total arrivals of 13.4 million.

“This increase was mainly as a result of higher tourist arrivals from Indonesia, China and Thailand, which offset the decline in tourist arrivals from Singapore and Brunei.

“Collectively, these five countries constituted 78% of the total tourist arrivals in 1H 2019,” it said.

On the average operating profit margin of Malaysian carriers, Mavcom said it fell to 0.3% yoy in the first six months of this year on the back of rising costs.

However, the average cost per available seat km (CASK) increased 5.9% yoy to 17.9 sen, while revenue per available seat km (RASK) fell by 2.2% to 15.9 sen, it said.

“Mavcom takes note of the greater RASK-CASK negative spread in 1H 2019 compared to the corresponding period in 2018, reflecting the decreasing profitability of Malaysian carriers and a challenging operating environment in Malaysia,” said the regulator of civil aviation-related economic and commercial matters.

It added that stronger domestic passenger traffic growth relative to international passenger traffic growth could also influence aerodrome operators’ earnings in 2020 as passengers incur a lower passenger service charge for domestic travel, it added.

As for seat capacity by Malaysian carriers, Mavcom expects it to grow by 2.0% in 2020, slower than the 4.3% recorded in 2019.

Subsequently, average fares by the carriers are forecast to remain flat or rise slightly due to slower growth in capacity, which may also enable local carriers to improve their load factors, it added. – Bernama

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