Newsroom / Announcements / MAVCOM Expects 2021 Passenger Traffic To Rebound Between 94.2 Per Cent and 100.3 Per Cent YoY

MAVCOM Expects 2021 Passenger Traffic To Rebound Between 94.2 Per Cent and 100.3 Per Cent YoY

8 Dec 2020

 

KUALA LUMPUR, 8 December 2020 – The Malaysian Aviation Commission (MAVCOM) today published the eighth edition of its Industry Report, Waypoint. The report lays out the  performance of the Malaysian aviation sector as at the third quarter of 2020 as well as expectations for the rest of 2020 and prospects for 2021. 

MAVCOM forecasted in the June 2020 edition of Waypoint that passenger traffic this year  would contract by between 48.7 per cent and 50.3 per cent year-on-year (YoY) due to muted  demand during the first five months of 2020 (54.3 million – 56.0 million passengers). Given  the expected lower load factor and longer period of seat capacity recovery by airlines  compared to the previous forecasts, MAVCOM has further revised its passenger traffic  forecast for 2020. The Commission expects a contraction in passenger traffic of between 72.8 per cent to 75.7 per cent YoY, which translates to between 26.6 million and 29.7 million  passengers this year. 

Malaysia’s passenger traffic dropped to its lowest in Malaysian aviation history recording only  802,525 passengers in 2Q20, which signified a 97.0 per cent YoY decline from 26.7 million  passengers recorded in the second quarter of 2019. This decline was largely attributed to the  lower load factor and a longer period of seat capacity recovery by airlines as they continued 

to cut seat capacity. However, passenger traffic recovered slightly in 3Q20, demonstrating a  smaller decline of 83.3 per cent YoY. This slight recovery was attributed to the easing of domestic travel restrictions.  

MAVCOM estimates that passenger traffic will rebound in 2021, by between 94.2 per cent and  100.3 per cent YoY, which translates to 51.7 to 53.3 million passengers next year. Airlines are  expected to gradually expand seat capacity as international travel restrictions are presumably  lifted in 2021. This forecast however, relies chiefly on the performance of the industry which  is dependent on a range on external factors including the pathway of the COVID-19 pandemic,  public health measures as well as consumer behaviour.

In relation to average fares by Malaysian carriers, average fares decreased to RM275 in the  third quarter, compared to RM369 in 2Q20 as airlines were allowed to operate at full capacity  without implementing the in-flight social distancing (ISD) regulations. The decrease was also  due to the airfare promotions offered by Malaysian carriers to attract passengers to fly  domestically after the domestic travel restriction was lifted.  

Revenue-at-risk for Malaysian and foreign carriers is expected to hover between RM14.3 billion and RM6.7 billion, an increase compared to the previous estimates of between RM11.3 billion and RM4.6 billion. As for Malaysian aerodrome operators, revenue at risk derived from  passenger service charge is estimated at RM717.7 million, increasing from the previous  estimate of RM500.0 million. Together, revenue-at-risk for both carriers and operators are estimated at RM15.0 billion, an increase from the previous projection of RM11.8 billion.  

Kuala Lumpur’s (KUL) airport (KLIA and klia2) air connectivity ranked sixth place in ASEAN,  dropping from third place last year. This drop in ranking was due to a 95.8 per cent YoY  reduction in the number of international seats from KUL, which was recorded as one of the  largest reductions amongst the major airports in ASEAN due to the COVID-19 pandemic.  Similar to the busiest airports in ASEAN, KUL experienced a decrease in the number of  international destinations and seat capacity, as a result of border restrictions imposed by the government to contain the spread of COVID-19. 

YBhg. Datuk Seri Saripuddin, Executive Chairman of MAVCOM said, “Aviation has been one  of the most heavily impacted sectors due to the COVID-19 pandemic not only here in Malaysia  but also globally. As a result, we see airlines adopting various measures for business  sustainability, including retrenchment and debt restructuring. Given the ongoing uncertainties,  a few potential events involving the five local airlines that may transpire in the future have  been identified while the potential effect to air connectivity has been analysed and is detailed  in the latest Waypoint report.” 

“Although the sector’s outlook is largely dependent on the pace of recovery from COVID-19  locally, regionally and globally, the Commission is of the view that the aviation industry will be  on a long road to recovery.”

The Waypoint Report is released on a quarterly basis and more information can be found on  MAVCOM’s website at www.mavcom.my. 

The Waypoint Report is available as a PDF here.

 

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