KUALA LUMPUR: Malaysia's air passenger traffic seems set for a full-swing recovery as the number of passengers flying in and out of the country is expected to reach the high of 2019 levels in 2024.
The traffic volume may grow 54-58 per cent to 84.5 million-86.5 million passengers this year. This is higher than the 74.6 million-80.8 million passengers projected earlier by the Malaysian Aviation Commission (Mavcom).
For 2024, Mavcom expects the traffic to grow 10-25 per cent to between 93.9 million and 107.1 million passengers, reflecting a recovery of up to 98 per cent of 2019 levels.
"Domestic and international travel to China and the Asean region will influence the recovery momentum," the aviation regulator said in its 14th edition of the Waypoint Report released on Wednesday.
"Downside risks include heightened jet fuel prices, depreciation of the ringgit, delays in aircraft deliveries,and manpower-related issues," Mavcom added.
For the first three quarters in 2023, Malaysia's passenger traffic grew consistently at an average rate of 7.6 per cent QoQ. As at October, passenger traffic reached 69.9 million.
The main driver of passenger traffic continued to be domestic travel accounting for 53.5 per cent of the total p,assengers in the third quarter of 2023 (3Q23), followed by Asean (24.6 per cent) and non-Asean (21.9 per cent).
In terms of growth, the non-Asean international region saw the highest increase of 23.7 per cent YoY in 3Q23.
On the other hand, the Asean and domestic regions experienced more moderate growth rates of 7.1 per cent YoY and 2.3 per cent YoY respectively.
Mavcom's bullish expectation, though, is not shared by aviation consultancy Endau Analytics founder and aviation analyst Shukor Yusof.
"This forecast is overly optimistic, in our view. It doesn't factor in a further weakening of the ringgit, high energy prices and worsening geopolitical tensions," he told Business Times.
Shukor expects a deterioration in air travel appetite beyond the firsdt quarter of 2024 due a decline in consumer spending brought about by entrenched inflation and a sharper-than-expected slowdown in the global economy.
"The airline sector is also vulnerable to widened human conflicts," he added.
Meanwhile, Malaysia's cargo volume dropped 15.3 per cent YoY to 4.7 billion freight tonne kilometre (FTK) in Q3 2023, due to weakened external demand, slower global growth, and the ongoing geopolitical crises.
Thus, Mavcom revised the 2023 air cargo forecast downward, with an anticipated decline of 14.1 per cent YoY to 13.5 per cent YoY translating to 18.7 billion to 18.8 billion FTK.
A potential turnaround is expected in 2024, with projected growth of 6.0 per cent YoY to 6.6 per cent YoY translating to 19.8 billion to 20.0 billion FTK.
This will be driven by the low base in 2023, a potential upturn in the global technology cycle, continued recovery in China and expected economic stabilisation.
In terms of connectivity, Mavcom said Malaysia remained in the fifth position in Asean, with a connectivity score of 79.7 in Q3 2023.
Kuala Lumpur International Airport ranked third among the major airports in Asean in terms of direct air connectivity with a score of 59.9.
Singapore's Changi Airport remained at the forefront with a score of 102.1, followed by Thailand's Suvarnabhumi Airport at 89.1.
"About 55.3 per cent of Malaysia's international seat capacity was concentrated on Asean destinations, indicating a significant reliance on traffic between neighbouring countries.
"Based on several indicators - number of hub passengers, number of connecting flights, number of direct destinations, number of airlines, and average connecting times - Asean airports show mixed international hub connectivity performance in 2023.
"This analysis enables stakeholders to identify gaps and weaknesses, as well as develop and implement actionable strategies to enhance hub connectivity," it added.
