Wednesday 21 Feb 2024
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KUALA LUMPUR (April 29): CGS-CIMB Research has maintained its “overweight” rating on the aviation sector and said it expects Malaysia Airports Holdings Bhd (MAHB) to benefit from stronger travel volumes.

In an aviation sector note on Thursday (April 28) after Malaysia announced that all pre-departure and on-arrival Covid-19 tests for fully-vaccinated travellers will be removed from May 1, the research house said tis will reduce the cost and risk of international travel.

“We expect [this] to lead to a stronger pace of recovery; quarantine was abolished from April 1.

“It also makes a big difference that other countries surrounding Malaysia are similarly relaxing their testing requirements,” it said.

CGS-CIMB said that in March 2022, MAHB’s domestic passenger traffic recovered to 59% of the March 2019 level, but international traffic only recovered to 9.4%.

“We expect both to rise sharply from April onwards, and have pencilled in recovery to average 85% and 40% of the 2019 level respectively for FY22F.

“We expect that our top pick MAHB will benefit from stronger travel volumes. Reiterate sector 'overweight',” it said.

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