KUALA LUMPUR, Feb 2 — Air passenger traffic is expected to fully recover this year, with initial projections showing a four per cent growth compared to the pre-pandemic 2019 levels, according to MIDF Research.
The research firm said a key anticipated development is AirAsia’s scheduled full fleet reactivation in the first quarter of 2024 (1Q 2024) following initial delays, which should catalyse the complete recovery of air passenger traffic.
“The visa-free entry for Chinese and Indian passengers is also expected to contribute to the further recovery of the Northeast Asian region, as the non-Asean sector trails with a 73 per cent recovery in 2023,” it said in a note today.
MIDF said the impact of the visa-free entry implemented from December 2023 onwards is not yet significantly evident, possibly due to the gradual seat capacity growth adjusting to demand.
Nonetheless, it said the latest airlines’ seat capacity filing for 2024 indicated a 13.0 per cent increase year-on-year.
Meanwhile, RHB Research said the Malaysian Aviation Commission (Mavcom) expects passenger traffic in Malaysia to reach between 93.9 million and 107.1 million passengers this year, signifying a full recovery.
Its in-house 2024 passenger traffic forecast of 105.9 million also points to a full recovery (2019 passenger traffic: 105.2 million).
“While we regard China as a key laggard, the rapid resumption of seat capacities and visa-free facilities for citizens from China and India should serve as a compelling catalyst in 2024, stimulating Malaysia’s international tourism.
“We believe the resurgence in commercial rentals, tourism upswing and potential operational changes from regulatory developments present under-appreciated catalysts which are yet to be fully assimilated by the market,” RHB Research said.
Furthermore, it said airports in Malaysia welcomed 4.0 million international passengers in December 2023 — the highest monthly traffic since February 2020.
This brought the full-year total to 81.9 million passengers (83.2 per cent of 2019’s level), with international and domestic movements at 38.6 million and 43.3 million, respectively.
“The average load factor recorded in 2023 was 77.2 per cent, with December 2023 having the highest average load factor for both international and domestic sectors at 80 per cent,” the research firm said.
It maintained a “buy” call on Malaysia Airports Holdings Bhd (MAHB) with a target price (TP) of RM8.66, noting that key risks include further delays in the commencement of regulatory frameworks; lower-than-expected passenger volumes, passenger service charges and parking and landing charges; as well as a higher-than-expected operating expense.
At the same time, MIDF Research maintained a “neutral” call on Capital A Bhd (TP: 80 sen) and MAHB (TP: RM7.80).
— Bernama
