Increase in demand for business and leisure air travel
PETALING JAYA: Demand for air travel continues to grow and airlines are launching new routes as well as reinstating the remaining grounded fleet to tap into this growth.

Malaysia can expect tourist arrivals to reach over 27 million this year to the benefit of players in the aviation and tourism industries. These should drive growth for Malaysia Airports Holdings Bhd ’s (MAHB) passenger throughput and Capital A Bhd ’s passenger demand this year, said Kenanga Research. A key driver is Chinese tourists that historically contributed to about 12% of total tourist arrivals in Malaysia.

Also helping, is a 30-day visa-free arrangement for Chinese and Indian visitors to Malaysia. Demand is higher for both business and leisure air travel, noted Kenanga Research in a report.

According to the research firm, MAHB’s system-wide passenger throughput will rise by 7% to 131 million in 2024 via the resurgence in passenger numbers and connectivity. This will be driven by the introduction of new airlines and services at key airports, including Kuala Lumpur International Airport, Penang, Kota Kinabalu and Langkawi.

“All in, over 90% international recovery is expected in the first half of 2024, with local carriers expected to increase capacity further in 2024 via reinstating the remaining grounded fleet and upgrading to 737-8 and 321 NEOs.

“A similar trend is seen for Capital A’s passenger demand in 2024, paving the way for its system-wide revenue seat km to grow 20% to an estimated 70 billion in 2024.”

This is after recovering by an estimated 24 billion to 58 billion in the financial year 2023 (FY23) based on its forecasts.

The group reiterated that the passenger throughput recovery is gaining traction. It is targeting to re-activate 202 aircraft by the end FY24 (presently 187 aircraft) available for operation and capacity to reach 83% of pre-Covid level.

In addition to fleet re-activation, Capital A’ expects further upside from the current high yield environment underpinned by the robust demand with forward bookings in February and March standing at 91% and 49%, respectively.

It plans to launch more than 60 new routes across the group, expanding in China and India and start AirAsia Cambodia operations by the mid 2024.

Capital A’s regularisation plans to exit PN17 is also in the works.
Aviation,MalaysiaTourism,TravelRebound,MAHB,ChinaTourists,VisaFreeTravel,NewRoutes,HighYield,CapitalA
Demand for air travel continues to grow and airlines are launching new routes as well as reinstating the remaining grounded fleet to tap into this growth.