Malaysian aviation industry ‘well positioned for growth’, to exceed 100m pax in 2018: MAVCOM

    Malaysian Aviation Commission (MAVCOM) reported (28-May-2018) the following highlights from its ‘Waypoint’ 2018 industry report:

    • Strong year-on-year industry performance in 2017. Malaysia passenger traffic increased 8.1% to 99.1 million;
    • Traffic growth of between 6.5% and 7% to more than 100 million passengers forecast for 2018;
    • Malaysian carriers’ RASK outgrew CASK in 2017, resulting in a 42.5% decrease in the “negative spread” between CASK and RASK in 2017;
    • Malaysian aviation industry’s financial performance improved from an operating loss of MYR500 million (USD125.5 million) in 2014 to an operating profit of MYR1.6 billion (USD401.8 million) in 2017;
    • Market capitalisation of aviation companies increased 38.4% from MYR18.5 billion (USD4.6 billion) at the beginning of 2014 to MYR25.6 billion (USD6.4 billion) at the end of 2017. The “solid growth” was supported by strong demand, improved seat inventory control and a low fuel price environment;
    • The crude oil price is expected to increase by 10.7% to 30.5% year-on-year in 2018, which may exert downward pressure on airlines’ profitability, already “sensitive” due to the competitive low fare environment;
    • Malaysia’s air connectivity improved with the addition of eight international destinations and approximately 360,000 seats in 2017. Asia remains the principal region of focus, with ASEAN, China and India accounting for 59.8% of air traffic rights awarded by MAVCOM. 56.4% of airports with connections to Malaysia are within Asia Pacific;
    • Malaysia was the fourth most connected country in ASEAN by point-to-point passengers, after Thailand, Singapore and Indonesia, which have more connections to airports with a higher share of international traffic, both within and beyond Asia Pacific. Singapore and Thailand are also connected to more destinations and have more seats to those destinations compared to Malaysia;
    • Kuala Lumpur International Airport is the second largest international hub in ASEAN by connecting passengers, after Singapore Changi Airport. Kuala Lumpur Airport primarily handled intra-Asia connecting traffic between China, India, Thailand and Indonesia in 2017, compared to traffic between Australia, Europe and Southeast Asia in 2010.

    MAVCOM executive chairman Abdullah Ahmad said: “On the whole, the Malaysian aviation industry appears well-positioned for growth, despite the challenges to be had given narrowing margins and rising oil prices. The last two years have been strong from an industry standpoint, as shown by passenger traffic growth, industry operating profitability and the market capitalisation of public-listed aviation companies during this timescale, especially in comparison to the immediate period before. Challenges remain, but MAVCOM is optimistic that the positive industry performance of recent years will continue in 2018”. [more – original PR]