KUALA LUMPUR (Dec 27): The Malaysian aviation sector is poised for a 4% growth in overall passenger movement in 2024, driven by the expansion of local airline fleets, the return of both new and existing foreign airlines, and a gradual resurgence of Chinese tourists, according to MIDF Research.
In a note on Wednesday, the research house projected that the airline traffic flying Malaysian skies in December 2023 would receive a partial boost from the 30-day visa-free entry agreements with China, India and the Middle East, as well as the peak travel season.
“Going into CY2024 (calendar year 2024), local carriers and the top five foreign carriers flying into Malaysia are projected to boost seat capacity by around an increase of 24% and 31%, respectively,” MIDF said.
According to MIDF, the notable airlines anticipated to enter in the second half of CY2024 (2HCY2024) include Air India, British Airways and Qantas.
"Malaysia Airports Holdings Bhd (MAHB) is actively expanding its broader hub, aiming for 83 airlines operating from domestic airports in the next two years, which would exceed the 2019 figure by 20%,” MIDF added.
While the industry is gearing up for expansion, MIDF maintained its ‘neutral’ stance on the aviation sector, as well as its ‘neutral’ rating for both MAHB (target price or TP: RM7.80) and Capital A Bhd (TP: 84 sen), citing the potential upside from the strong international traffic at Istanbul Sabiha Gokcen International Airport and the expected finalisation of the new operating agreement in the first quarter of 2024.
According to MIDF, the Malaysian aviation sector has shown a strong recovery in passenger traffic in November 2023, reaching 77% of pre-pandemic levels.
Malaysia’s passenger traffic increased by 27.4% year-on-year in November 2023, with 6.6 million passengers. The international passenger traffic surged by 51.8%, while the domestic passenger traffic increased by 8.8% compared to November 2022.
MIDF attributed the sustained growth in international traffic to the launch of four new services from Kuala Lumpur International Airport to the United Arab Emirates by Batik Air Malaysia, as well as the commencement of flights by Malaysia Airlines to India and Firefly to Thailand.
The domestic sector also maintained an average load factor of above 80% for the second consecutive month, signalling a positive recovery in demand despite the airline’s seat capacity being at 66% of pre-pandemic levels.