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2021 Air Passenger Traffic to Contract between 22.9 and 29.1 Per Cent Year-on-Year

28 Apr 2021

 

KUALA LUMPUR, 28 April 2021 – The Malaysian Aviation Commission (MAVCOM) today published its commentary on Malaysian air passenger traffic in 2021. The commentary detailed MAVCOM’s downward revision of its air passenger traffic forecast as well as the challenges facing the aviation industry in its path to recovery.

In the December 2020 edition of Waypoint, MAVCOM forecasted that passenger traffic in 2021 would rebound by between 94.2 per cent and 100.3 per cent year-on-year (YoY) equalling 51.7 to 53.3 million passengers, due to the gradual recovery of the aviation sector as international travel restrictions were expected to be lifted in 2021.

Given the recent resurgence of COVID-19 cases in Malaysia and globally, MAVCOM has revised its passenger traffic forecast and expects a contraction of between 22.9 per cent and 29.1 per cent YoY, which translates to 18.9 to 20.6 million passengers.

The first quarter of 2021 saw only 1.7 million passengers utilising air services, a 91.1 per cent YoY decline from 19.1 million passengers in 1Q2020, which could signal significantly lower passenger traffic numbers for the rest of the year. Given the reimplementation of the Movement Control Order (MCO) and with travel restrictions expected to potentially be enforced throughout 2021, demand for air travel is expected to be impacted. MAVCOM’s forecast also took into consideration the expected lower load factor and seat capacity for the year.

Given that the domestic market contributed significantly to the sector in the second half of 2020, MAVCOM expects the domestic market to continue being the key driver in reviving the industry with a view that the travel bubble between the Recovery Movement Control Order (RMCO) states remain. However, this forecast is premised on the prevailing conditions of the COVID-19 pandemic.

The aviation industry is expected to continue weathering the impact of the COVID-19 pandemic as uncertainties loom over the industry’s path to recovery.

In February 2021, the Government of Malaysia launched the National COVID-19 Immunisation Programme, which will be undertaken in phases. Pre-pandemic, air travellers mostly comprised of healthy adults. The vaccination rollout for healthy adults will be in the last phase, which is Phase III running from May 2021 until February 2022.

Unfortunately, negligence and complacency in observing public health measures may also increase in tandem with vaccination efforts, causing a potential new wave of infections. This will further delay the recovery of the aviation industry.

Furthermore, flight cancellations due to international and interstate border closures in 2020 and the resulting refunding issues may impact public willingness to travel by air. In the second half of 2020, the processing of refunds, flight cancellations and flight rescheduling were the top three complaints recorded by the Commission.

Further to this, the reopening of Malaysia’s international borders is subject to approval by National Security Council and the latest COVID-19 developments in Malaysia and other countries. Importantly, the verification of vaccination certificates and standardised implementation of quarantine Standard Operating Procedure (SOP) worldwide must be in place in order to safely reopen borders and commence international travel.

Malaysia is studying the implementation of an internationally recognised digital health pass, such as the International Air Transport Association (IATA) Travel Pass, which informs passengers on tests, vaccines as well as other measure they would need to look into prior to travelling. The pass also provides travellers the ability to share their test and vaccination results in a secure manner. The adoption of the IATA Travel Pass is expected to facilitate post-COVID-19 travel and spur international passenger movement. Coupled with this, air travel bubbles between green zone countries could also boost passenger traffic.

Datuk Seri Hj. Saripuddin Hj. Kasim, Executive Chairman of MAVCOM said, “The Commission’s downward revision of passenger traffic for 2021, brings to the fore, the clearly difficult task of weighing the underlying challenges faced by the industry. The vaccine rollout timeline, implementation of stricter or eased public health measures, safe reopening of international borders for air travel as well as changes in air travel demand will continue to influence the sector’s speed of recovery. As we move further into 2021, MAVCOM will closely observe and assess market developments as well as efforts in mitigating the impact of the COVID-19 pandemic as we support the return of the nation’s aviation sector to pre-pandemic levels.”

Waypoint reports are released on a biannual basis and can be found on MAVCOM’s website at www.mavcom.my. The December 2020 edition of the Waypoint Report is available as a PDF here.

The commentary on Malaysia’s 2021 Air Passenger Traffic Forecast Revision can be found here.

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