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Aviation industry and analyst view

Posted on November 10, 2013, Sunday

With the opening of new low cost carrier terminal, KLIA2, in May 2, 2014 which is bigger and is able to cater for higher volume of passengers, air traffic is expected to be enhanced.

In addition, new airline such as Malindo Air and more freqencies by flights for instance Maswings which flies to rural areas in Sarawak and Sabah will also boost the local aviation industry.

Similarly, under Budget 2014, the government has announced plan to upgrade several airports such as Miri, Sibu and Mukah to increase passenger’s comfort.

On a wider picture, airport operator Malaysia Airports Holdings Bhd (MAHB) in a recent statement said Kuala Lumpur International Airports (KLIA) passengers volume for the third quarter of 2013 grew 23.1 per cent year-on-year to 12.1 million, the highest number achieved for a single quarter.

The airport operator noted that aircraft movements for the month of September 2013 rose by 17.3 per cent year-on-year as compared with September 2012.

It added that the general load factor for international movements in September 2013 was 73.3 per cent, 4.4 per cent higher than 2012.

For domestic load factor which includes Kuching International Airport and other airports in Sarawak, it noted that there was a slight increase of 4.1 per cent to 72.5 per cent in September 2013 compared with September 2012.

Coming forth, with several initiatives to boost the tourism industry  and the aviation industry in Budget 2014, MAHB managing director Tan Sri Bashir Ahmad said “We welcome the Government’s decision to formulate a National Aviation Policy.

“It will be good for the aviation industry.

“Airports, airlines and relevant stakeholders will be able to work together to promote air travel,” he said .

Over to Sarawak, Maswings, a subsidiary of Malaysia Airline System Bhd has in September launched new aircraft in Bario.

With the launching, more flights are expected to connect the rural areas with major towns in Sarawak.

Likewise, research firm RHB Research Sdn Bhd in a report noted that VMY 2014 bodes well for the aviation industry.

Its research analyst Ahmad Maghfur Usman said “We are of the view that VMY 2014 and other tourism boosting initiatives by the Government as beneficial for the overall aviation industry.

“The arrival of Malindo Air into the market, however, has increased competition among the airlines and hence we still believe that tough times remain for the carriers although we think AirAsia has done fairly well in cushioning the downside impact of the heightening competition on its yields.

“On the other hand, we see efforts by the government to promote Malaysia as a major tourist attraction will be beneficial to airport operator MAHB.

“This is because capacity expansion and competitive rates will boost air travel demand and result in increased usage of its airports,” said Ahmad Maghfur.

Therefore, RHB Research maintains its positive outlook for the aviation industry and MAHB due to higher air travel and usage of airports.

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