Selangor Journal
As more flight routes are reinstated and flight frequencies increase, Malaysia’s air passenger traffic recovery is set to improve for the rest of the year. — Picture by BERNAMA

Air travel recovery to reach 85 pct of pre-pandemic levels this year

KUALA LUMPUR, July 4 — Malaysia’s air passenger traffic recovery is expected to gather pace in the second half (H2) of 2023 to reach 85 per cent of the pre-pandemic levels for the full year, said MIDF Research.

The non-Asean sector holds considerable growth prospects as more routes are reinstated and flight frequencies increase, the research firm said in a note today following Malaysia Airports Holdings Bhd’s (MAHB) announcement that airports in the country recorded 6.8 million in passenger movement in May 2023, thus surpassing 80 per cent of pre-pandemic levels for the first time.

MIDF Research described the traffic recovery, at 86.2 per cent against May 2019 passenger movements (domestic: 99 per cent, international: 74 per cent), as “impressive”.

However, it remained “neutral” on the aviation sector, saying it will not revise its passenger traffic assumptions.

The overall traffic recovery figure of 85 per cent for 2023 comprises 90 per cent (improvement) for domestic flights and 80 per cent for international ones.

“Potential upsides to our numbers are local airlines being able to rebuild their fleet and faster-than-expected return of Chinese tourists,” the research house said.

MIDF Research maintained a “buy” on Capital A Bhd (target price: RM1) and “neutral” on MAHB (target price: RM7.45).

Hong Leong Investment Bank (HLIB) Research said air travel is expected to continue to recover as airlines reinstate pre-pandemic capacities.

“Since the reopening of Malaysia’s borders in April 2022, as well as in other Asia-Pacific countries, we have seen a strong recovery of air traffic.

“International traffic recovery (including Asean) continued to gain traction as domestic airlines — Malaysia Airlines and Capital A — are restoring international capacity back to 100 per cent by year-end, similarly for foreign airlines,” it said in a separate note.

HLIB Research said MAHB guided the recovery rate of planned airline seat capacities to remain above 90 per cent for the domestic segment (currently 94.3 per cent) and breach 80 per cent for the international segment (currently 76.4 per cent) by year-end.

The research house kept its “overweight” rating on the aviation sector with “buy” recommendations on Capital A (target price: RM1.15) and MAHB (target price: RM8.50). 

— Bernama

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