Aviation: Strong international passenger traffic expected in 2H18
KOTA KINABALU: Malaysia’s aviation sector is expected by analysts to see strong international passenger traffic in the second half of 2018 (2H18).
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) expected the positive momentum of traffic flow to remain, coming from the long holidays in countries such as China.
“It is worth noting that Chinese tourists represent a significant portion of international traffic which we attribute to the relaxation of visa permit to Malaysia and demographic factors,” MIDF Research said.
“The occurrence of golden week in October is also expected to encourage outbound travel among Chinese tourists.
Revenue from retail segments has also been projected by the research arm to benefit given higher footfalls expected in the month of October in airports operated by Malaysia Airports Holdings Bhd (MAHB).
MIDF Research highlighted that low cost carriers (LCCs) such as AirAsia Group Bhd (AirAsia) and AirAsia X Bhd (AirAsia X) are poised to register higher earnings moving forward due to notable presences in North Asia routes.
The research arm reiterated that China will lend strong base in passengers carried.
Accordingly, the research arm opined that load factor will remain strong above 85 per cent.
“While the entries of new LCCs in the market are expected, given the growing demand, we believe both AirAsia and AirAsia X will maintain its pole position.
“This stems from the company’s comprehensive and forward-looking strategy of retaining its dominant market share in the region via additional frequency utilisation and competitive fare prices.”