New travel rules will support strong air travel revival

KUCHING: Further easing of travel restrictions alongside reduced quarantine requirements as well as better testing procedures will support a strong air travel revival in the coming quarters.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) recapped that in their recently reported financial year 2021 (FY21) results, Malaysia Airports Holdings Bhd (MAHB) came in within expectations but AirAsia came in below.

“The string of losses over the past two years could come to an end or reverse as we move into the second half of 2022 (2H22) with the relaxation of travel restrictions and reopening of borders,” Kenanga Research said in its aviation sector update.

“While we expect a gradual recovery in air travel beginning 2H22, delayed border re-openings and inconsistent entry requirements for travellers may delay a strongly expected tourism recovery in the short term.

“However, further easing of travel restrictions alongside reduced quarantine requirements and better testing procedures, will support a strong air travel revival in the coming quarters.”

Kenanga Research recapped that the Thai government has resumed its quarantine-free travel scheme from February 1 and is lowering entry requirements from March 1, 2022.

The research arm also highlighted that the reopening of the Philippines to fully vaccinated international travellers without quarantine are positive factors.

“The move by Malaysia to reopen its borders on April 1, 2022 to fully-vaccinated travellers from all countries is positive to Malaysia Airports, requiring only a pre-departure PCR test and an on-arrival professionally-administered RT-Antigen (or ART) test within 24 hours of arrival.

“MAHB is a beneficiary of border reopening, capitalising on the anticipated strong low base recovery for air travel with domestic demand to recover strongly back to 60 per cent of pre-pandemic levels.”