Aviation industry shows greater operational efficiency in 2018
KUALA LUMPUR: Malaysia’s aviation industry had a fairly ‘stable’ 2018 with airlines showing greater efficiency in operations but overall growth has been slowing down as the industry heads towards a matured phase.
Maybank Kim Eng analyst Mohsin Aziz said growth in passenger movement for this year was likely to be two per cent, relatively lower than during the 17-year period in the country from 2000-2016, where growth was at almost eight per cent per annum on the back of cheap airfares and higher average flight per population.
In 2017, traffic improved 8.5 per cent to 96.54 million passengers from 88.98 million in 2016, the second highest increase in the last 20 years.
He said the current average age of Malaysians, with the population getting older and travelling less, also partly contributed to the slower growth this year.
“Ever since the MH370 (incident) in 2014, our growth has been slowing down a lot. So basically, our high growth phase is over already and now we are in the slower maturing growth.
“This is normal because we are already at the stage where we’ve travelled enough,” he told Bernama.
Commenting on the industry players, Mohsin said both the airlines and airport operator had become more efficient, with their balance sheets showing pretty stable financial results compared with volatile profits and losses previously.
In fact, utilisation of the entire aviation assets has also improved significantly with the load factor of airports and aircraft being quite full throughout January to December.
“Thanks to the gradual improvements ( by industry players) over the years, we are closer to be a mature developed country.
“We are not there yet but we are on the last mile. So that is why you see all these improvements,” he elaborated.
To recap, the entire industry landscape this year was tested with a challenging economy and falling profitability in the corporate sector amid higher fuel spending as the oil price recovered and the foreign exchange turned volatile.
In the third quarter ( Q3) ended Sept 30, 2018, Malaysia Airlines Bhd’s (MAB) operating performance was affected by stiff competition, rising fuel prices and adverse foreign exchange movements, and this was further exacerbated by a crew shortage, especially in July and August.
Group chief executive officer ( CEO) Izham Ismail described the period as “challenging” with the airline recording a lower passenger yield of 21.5 sen against 22.6 sen in the same quarter last year.
The national airline carried 2.1 per cent more passengers at 3.47 million during the reviewed quarter compared with 3.4 million a year ago.
Meanwhile, AirAsia Group Bhd’s (AAG) operating profit in Q3 2018 was nearly halved to RM253 million against RM494 million in the same period last year, its lowest since the quarter ended June 2015, due to higher fuel costs as crude oil surged 50.1 per cent to US$95 per barrel. Turn to Page B2, Col 4