KUALA LUMPUR, Oct 14 — The 15th General Election (GE) is expected to add fuel to the recovery in the aviation industry, with a long-term positive impact on passenger traffic and a short-term positive impact on airfares.
Maybank Investment Bank Bhd (MaybankIB) said that historically, passenger traffic tends to rise during GEs as voters return to their voting constituencies to vote, especially voters whose voting constituencies are across the South China Sea in Sabah and Sarawak.
It said Malaysia Airports Holdings Bhd’s domestic passenger traffic grew 18 per cent in 2013 (GE13) and 3.0 per cent in 2018 (GE14), while Capital A Bhd, the operator of AirAsia, saw its Malaysian operation’s passenger traffic rising 11 per cent in both GE13 and GE14.
“We expect GE15 to exhibit similar trends. What intrigues us further is that the rise in passenger traffic in the past appears to be structural.
“In other words, passenger traffic does not ease post-GEs but stabilises or even continues growing,” it said in a note today,
As such, MaybankIB has maintained its ‘positive’ view of the Malaysian aviation sector, but noted that GE15’s impact on the sector might be less potent this time around, as the voter turnout might not be as high as GE13 (80 per cent) and GE14 (76 per cent).
At press time, Pakatan Harapan is still deciding on whether to dissolve the Penang and Negeri Sembilan state assemblies after deciding not to dissolve the Selangor state assembly, while the Islamic party PAS stated that it will not dissolve the state assemblies of Kedah, Kelantan and Terengganu.
Moreover, Sabah and Sarawak have already held their state elections in Sep 2020/Dec 2021, respectively.
MaybankIB added that voters might also be dissuaded from flying to their voting constituencies due to currently high airfares.
– Bernama
