Select Page

Newsroom / News Releases / Malaysia Boasts Third Largest Aviation Passenger Market in ASEAN

Malaysia Boasts Third Largest Aviation Passenger Market in ASEAN

15 Aug, 2017

Malaysia Boasts Third Largest Aviation Passenger Market in ASEAN
Other key industry insights highlighted in first MAVCOM Industry Report

KUALA LUMPUR, AUGUST 15, 2017 – The Malaysian aviation industry is poised for continued growth in passenger traffic for 2017. According to the Malaysian Aviation Commission’s (MAVCOM) first Industry Report, called Waypoint, passenger traffic growth in 2017 is expected to overtake growth rates in 2016 while average fares have been decreasing since 2010.

Released today, Waypoint aims to provide an outlook of the Malaysian aviation industry, along with commentary on current issues impacting the sector. As the Commission’s inaugural Industry Report, a brief historical review of the state of the industry from 2010 to 2016 was also shared and analysed.

YBhg. Gen. Tan Sri Dato’ Sri Abdullah Ahmad, RMAF, (Retd), Executive Chairman of MAVCOM, said, “Aside from our mandate to champion consumer rights, a core part of MAVCOM’s focus is to drive the commercial and economic aspects of the sector. This Waypoint Industry Report is the result of our efforts to lend greater insight and understanding of the Malaysian aviation industry. It is our belief that this transparency and clarity will also encourage the development of a more robust sector.”

Key Highlights

Waypoint focused on five specific areas which are key to understanding the aviation sector, namely industry outlook, macro overview, industry structure, industry performance, and airports and infrastructure.

Overall, the aviation industry contributed an average of RM5.1 billion annually between 2010 and 2015 to the domestic economy.

A key highlight from the Report includes MAVCOM’s forecast for passenger traffic in 2017 to grow at between 7.8 and 8.8 per cent, which is approximately equivalent to between 98.3 million and 99.2 million passengers.

This comes on the back of stronger demand for air travel as average fares declined in recent years, with fares for international routes seeing a sharper drop compared to domestic routes. In tandem, Malaysian carriers are expected to increase their capacity by 14.3 per cent during the year.

MAVCOM also notes that Malaysia, which is the third largest aviation market in ASEAN by passenger traffic, has seen improvement in its connectivity with the number of international destinations served by Malaysian airports increasing from 107 in 2010 to 116 in 2016.

The Report also notes that, although the non-scheduled services players in Malaysia collectively registered RM158.9 million in operating profits, only firms operating in the on-demand charter and oil and gas segments reported positive operating profit margins.

Similarly, MAVCOM noted that significant capital expenditure would be required in order to address capacity requirements for key airports in Malaysia, which have exceeded their theoretical terminal design capacities or are expected to exceed these capacities in the next five years. These include airports located in Penang, Subang, Langkawi, Kota Bharu, Miri, Kuching and Kota Kinabalu.

“The insights garnered from Waypoint indicate that, although there are some positive prospects for the Malaysian aviation industry, the operating environment is expected to remain challenging. Nonetheless, there are still opportunities within the sector and it is our hope that this will spur industry players into exploring these avenues to leverage on the potential that is inherent in this sector. More importantly, we believe there are synergies to be had with other industries such as the tourism sector, which can lead to the overall growth of our nation’s economy,” concluded Abdullah.

Waypoint Reports will be released on a bi-annual basis by MAVCOM.

The Waypoint Report is available as a PDF here.

The accompanying Technical Paper on the Aviation Sector Multiplier can be downloaded here.

For more information, visit our Industry Data page.