Newsroom / News Releases / MAVCOM Revises 2021 Passenger Traffic Forecast

Outlook indicates expansion in cargo volume amidst contraction in passenger movement 

KUALA LUMPUR, 26 August 2021 – The Malaysian Aviation Commission (MAVCOM or The Commission) today released the ninth edition of its Industry Report, Waypoint. The report included an overview of the Malaysian aviation sector in the first half of 2021 from a macroeconomic as well as an industry-specific perspective. The report further delved into the industry structure and performance in addition to the outlook for the sector post-COVID-19 pandemic recovery.

Following the implementation of the Movement Control Orders (MCOs) between 4Q20 and 2Q21, MAVCOM reported that total passenger traffic in 2Q21 stood at 1.3 million, the lowest it has been since 2Q20, which saw 0.8 million passengers. This represents a growth of 62.0 per cent year-on-year (YoY) due to a low base effect. Despite the drop in passenger traffic, an increase in domestic, short-haul travel is anticipated with the relaxation of movement restrictions for fully vaccinated passengers.

Taking into consideration a lower load factor and a longer period of seat capacity recovery by airlines, MAVCOM has revised its forecast for 2021 passenger traffic. The Commission now expects passenger traffic to contract by between 77.0 per cent YoY and 80.2 per cent YoY, which translates to between 5.3 million and 6.1 million passengers, significantly lower compared to the 18.9 million to 20.6 million passengers previously forecasted in April 2021. 

While muted passenger traffic numbers persist, the Commission highlighted that Malaysia’s total cargo volume expanded by 80.4 per cent YoY in 2Q21 due to high demand for vaccines, medical equipment, personal protective equipment, electrical and electronic (E&E) components as well as the solid growth seen in e-commerce. MAVCOM anticipates air cargo traffic in 2021 to expand by between 26.5 per cent YoY and 28.2 percent YoY and recover to pre-crisis levels.

Despite the ongoing pandemic, MAVCOM reported that Malaysia’s main cargo players have undertaken route expansions that may indicate a further increase in Malaysia’s cargo volume in the near future. World Cargo Airline (WCA) has also upgraded its licence from an Air Service Permit (ASP) to an Air Service Licence (ASL).**

As of 30 June 2021, MAVCOM approved 100 per cent of the 34 Air Traffic Rights (ATR) applications received in 1H21, reflecting an increase of 25.9 per cent YoY compared to the 27 ATR applications in 1H20. International routes received 26 ATR allocations with the largest share of ATR in 1H21 allocated for routes to China at 38.2 per cent. This was followed by allocations to domestic routes and the ASEAN region at 23.5 per cent each. 1H21 also marked the second consecutive half without expiry of any airline’s ATR portfolio, following MAVCOM’s decision to ease the condition which automatically revokes unutilised ATRs within six months from the date of the ATR approval.

Datuk Seri Hj. Saripuddin Hj. Kasim, Executive Chairman of MAVCOM said, “The aviation industry continues to be the hardest hit by the COVID-19 pandemic. While future trends indicate potential increase in domestic travel as the nation moves closer to reaching herd immunity and travel restrictions are relaxed for fully vaccinated passengers, the recovery rate of the sector remains uncertain. Beyond the pandemic, MAVCOM is working hard, in consultation with industry players, to prepare for the jumpstart of the aviation sector. Nonetheless, it is crucial for all stakeholders to be prepared for a new market that will be dominated by price-sensitive leisure travellers. In light of this, the Commission expects cost containment and reduction to become top priorities for airlines as well as airport operators.”

The Waypoint Report is released on a biannual basis and is available as a PDF here.

**Erratum: Mention of Raya Airways was omitted as it is an existing ASL Holder.