Malaysia’s air passenger traffic is expected to grow between 105.5 million and 106.7 million, a range of 2.9 per cent to 4.1 per cent growth, this year, according to the Malaysian Aviation Commission (MAVCOM). NSTP picture by MOHD FADLI HAMZAH.
Malaysia’s air passenger traffic is expected to grow to between 105.5 million and 106.7 million, a range of 2.9 per cent to 4.1 per cent growth, this year.
The Malaysian Aviation Commission (MAVCOM) said the forecast was due to greater uncertainty ahead as global and local economic growth was anticipated to grow marginally.
MAVCOM said the forecast would be mainly supported by domestic demand, adding seats for domestic routes in Malaysia were expected to increase 7.3 per cent year-on-year (YoY) with international market was expected to be minimal at 1.9 per cent YoY.
Executive chairman Dr. Nungsari Ahmad Radhi said the commission expected to see downward pressure on yields this year with similar downward pressure on revenues for Malaysian carriers.
“This is because seat capacity growth is expected to surpass passenger traffic growth. Jet fuel prices in 2019 could, on average, be lower than last year, which may provide some respite to any financial pressures faced by the carriers,” said Nungsari in a statement today.
MAVCOM said it will monitor domestic demand growth capacity closely in light of the forecast increase in seat capacity as that will have a significant bearing on the financial health of Malaysian carriers.
“International traffic growth also depends on many other factors but we would like to see better numbers for Asean traffic,” he added.
Meanwhile, MAVCOM today released the fourth edition of its bi-annual industry report that provides an overview of the aviation sector including an analysis on industry structure and performance as well as the outlook for the sector.
The International Air Transport Association (IATA) forecast the number of destinations served by airlines in 2019 to increase, along with flight frequencies, which will be the basis to support global passenger traffic growth in terms of revenue passenger kilometres (RPK) by 6.0 per cent YoY.
MAVCOM, in its report quoting IATA, the underlying global economic growth and the forecast of lower average fares would provide support to growth assumption for 2019.
IATA also highlighted that the average fares in 2019 forecast to be 61 per cent lower than the average fares reported in 1998, due to a deteriorating macroeconomic outlook as the underlying reason for the weaker growth in 2019.
The report revealed that Malaysian carriers were expected to increase capacity by 2.0 per cent YoY, in terms of available seat kilometres (ASK) and 5.7 per cent YoY in terms of number of seats.
“The divergence between the growth rates of capacity in terms of ASK and number of seats indicates that Malaysian carriers are adding capacity by operating higher frequencies to domestic and short-haul international destinations,” MAVCOM noted.
Citing an example, it said 93.8 per cent of additional seats to be deployed in 2019 would be for domestic destinations.
In contrast, MAVCOM said only 47.2 per cent of new seats that were deployed in 2018 were for domestic destinations.
MAVCOM noted for the international market, Malaysia Airlines and AirAsia were the only two Malaysian carriers planning to increase seats capacity in 2019.
“Both airlines will be making up 71.4 per cent share of international seats capacity in 2019.”
Last year, Malaysia recorded 102.5 million international and domestic passengers, primarily driven by international traffic that grew 5.5 per cent.
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