• Malaysia sees strong passenger traffic, MAHB set to record good FY17 • Aviation sector: Connecting people and economies
On the ground, airport operators such as Malaysia Airports Holdings Bhd (MAHB) are also expected to stellar year as passenger traffic as well as the newly implemented passenger service charge (PSC) rates are expected to boost its revenue this financial year.
In the first half of the financial year 2017 (1HFY17), MIDF Amanah Investment Bank Bhd (MIDF Research) noted that MAHB’s group revenue advanced 8.8 per cent y-o-y, led by the Malaysian operations (11.3 per cent y-o-y) while Turkey was flat (0.1 per cent y-o-y).
“PSC revenue was the key contributor to revenue growth at the Malaysian operations, rising 17.9 per cent y-o-y, underpinned by passenger traffic growth of 11.2 per cent y-o-y and higher proportion of international traffic at 50.3 per cent of total pax (48.8 per cent in 6MFY16).
“Retail and rental/royalty segments did well too, registering 15.9 per cent y-o-y and 12.2 per cent y-o-y growth respectively for the Malaysian operations.
“Retail sales per pax increased 11.1 per cent y-o-y while Eraman saw a 14 per cent y-o-y rise revenue, supported as well by better international traffic,” it said.
It also noted that rental and royalty revenue rose despite lower occupancy rate at klia2 – hovering around the mid-70 per cent range – as a result of better rental rates and sales volume.
“Slightly higher maintenance expenses are projected in 2HFY17 as the defect liability period draws to a close for klia2. Meanwhile, as anticipated, staff costs saw an uptick of 3.7 per cent y-o-y in 1HFY17 arising from a three-yearly group wide salary adjustment.
“The increments are retrospective in nature, adding a one-off RM7 million to RM8 million in of staff related expenses in 2QFY17.
“Positively, there was a 3.6 per cent yo-y improvement in utility expenses,” it adde.d
Overall, MIDF Research believed that FY17 is shaping up to be a good year for the airport operator.
It opined, “Notwithstanding the cost pressures, we see further room for improvement for MAHB in 2HFY17. We continue to be bullish on MAHB’s ability to grow its topline, benefitting from continuous capacity expansion by both local and foreign carriers.
“In addition, we foresee inbound/outbound travel demand to remain buoyant from the easing of entry visa requirements and fare discounting.”
Meanwhile, Kenanga Research believed that the new PSC rates are expected to boost MAHB’s revenue by crica10 per cent and provide improved earnings visibility for their Malaysian operations.
“We look forward to the next hike in PSC in FY18 whereby KLIA Main and KLIA2 will have the same PSC rates,” it said, noting that for FY17, the only difference in PSC rates for KLIA Main and klia2 is their International PSCs whereby KLIA is at RM73 while KLIA2 is at RM50.