Malacca tourism set to surge as AirAsia finally confirms its arrival date

Tourism in the historical Malaysian city of Malacca should surge as AirAsia finally launches flights to its underserved airport. Malaysia’s largest airline – and Asia’s largest LCC group – announced last week that it plans to start serving Malacca from 1-Jul-2019 initially operating a daily A320 flight from Penang.


Highlights:

  • AirAsia is launching flights to Malacca on 1-Jul-2019 with a daily service from Penang;
  • Malacca is a popular tourist destination but is currently only served by Malindo Air, which operates four routes and already links Penang;
  • Malacca’s airport was upgraded a decade ago to accommodate A320s but it has taken several years to woo AirAsia.

Malacca Airport has had limited commercial services over the last few decades. In recent years Malindo Air has been the only airline consistently serving Malacca. A few Chinese and Indonesian carriers have also served the market but only for brief periods.

Right now, Malindo Air is the sole airline with scheduled passenger services at Malacca (based on OAG schedules for the week commencing 8-Apr-2019). It has 20 weekly flights consisting of seven to Penang, seven to Pekanbaru, three to Kota Bahru and three to Langkawi. Pekanbaru is located on the nearby Indonesian island of Sumatra, on the opposite side of the Strait of Malacca, while Penang, Kota Bahru and Langkawi are domestic destinations.

The Langkawi route was launched in Mar-2019. Kota Bahru was also resumed in Mar-2019; it was initially launched in Nov-2014 but suspended after about one year. Pekanbaru and Penang have been served since Malindo Air first entered the Malacca market in Nov-2014. Malindo had previously competed with Indonesian airlines on the Pekanbaru route and will now have to contend with competition on the Penang route as AirAsia launches services.

CHART – Malindo Air’s launch of services to Malacca in late 2014 led to a spike in Malacca airport’s passenger traffic in 2015 but traffic declined in 2016 and has since been relatively flatSource: CAPA – Centre for Aviation and Malaysia Airports Holdings

AirAsia will drive a new phase of passenger traffic growth for Malacca Airport, which should finally be able to exceed 100,000 annual passengers. For several years the airline has spoken about serving Malacca, which is an obvious white spot in its Malaysian network.

The LCC currently serves 17 destinations in Malaysia. Following the relaunch of services to Ipoh and Kuantan in Oct-2018, Malacca was left as probably the only potentially viable Malaysian destination not yet served.

Malacca’s runway was extended over a decade ago to accommodate Airbus A320s and a new terminal opened in 2009, replacing a tiny facility that was way too small to accommodate 150-seat aircraft. However, it has taken another ten years to persuade AirAsia to serve Malacca Airport.

It appears a further upgrade in airport facilities and lower passenger service fees has finally helped woo AirAsia. The airline is also likely receiving an attractive incentive package from the local government and Malaysia’s airport authority.

While Malacca is one of Malaysia’s most popular tourist destination, its proximity to Kuala Lumpur International Airport (KLIA) has historically made it difficult to attract air services. KLIA is just 130km form Malacca and less than two hours by road. There are frequent bus services catering to passengers arriving at KLIA and heading to Malacca. In addition to tourists, the KLIA-Malacca bus serves the nearly one million residents of Malacca state that have become accustomed to using KLIA because of the limited services from their local airport.

While being close to one of Asia’s largest hub airports helps, more direct services would lead to faster growth for Malacca’s tourism industry. Malacca is a UNESCO heritage city with several historical slights. It is also a haven for foodies as Malacca restaurants are famous for traditional Nyonya (Peranakan Chinese) dishes.

Malacca is hopeful the new Penang service will be the first of several new routes for AirAsia. The LCC has been looking at serving Malacca with several potential destinations, including international destinations in China and Indonesia.

The tripling of capacity on the Penang route should help attract more foreign visitors as the new low fare AirAsia option will enable more tourists to combine two of Malaysia’s most popular destinations. Looking ahead, international services from AirAsia would have an even bigger impact on Malacca’s tourism industry and economy and will be its goal. Hopefully this time it will not take ten years to achieve.