Aviation’s 4Q could make up for shortfall of Chinese tourists during Golden Week

KUCHING: The aviation sector’s fourth quarter of financial year 2018 (4QFY18) results could make for the shortfall of Chinese tourists during the recent Golden Week.

The research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research) noted that there were circa 30 per cent decline in Chinese tourists during the Golden Week holiday from October 1 to 7 according to industry players, as Chinese Yuan depreciated 6.2 per cent against the US dollar and 3.1 per cent against the ringgit.

“This resulted in the decline in Chinese arrivals, not only in Malaysia but also our other Asean neighbours,” MIDF Research said.

“Notwithstanding this, we opine that 4QFY18 could still make up for this shortfall.”

According to MIDF Research, for the past couple of years, the month of December has always been the strongest month of the year, leading to the strength of the fourth quarter.

The research arm highlighted that in 4QFY18, there will be three public holidays falling on Tuesday; Maulidur Rasul, the birthday of Sultan of Selangor, and Christmas.

“Therefore, this is likely to further encourage travelling amongst Malaysians as they can take additional leave on the Monday before the public holiday to create a four- day weekend.”

On that note, given the encouraging trend of passenger traffic in KLIA2 especially from the domestic side, MIDF Research said that this puts low cost carriers (LCCs) such as AirAsia Group Bhd (AirAsia) to benefit significant as it commands a considerable market share in the KLIA2 for both international and domestic sectors.

Considering the 5.5 per cent y- oy growth in domestic passengers, the research arm opined that AirAsia will continue to record commendable operational statistics in 3QFY18.

It further noted that AirAsia’s market share of the domestic traffic at KLIA as of September 2018 accounted for 67 per cent, an improvement of seven percentage points (ppts) from the same period last year.

“Aside from that, the monthly growth of domestic traffic in KLIA2 from January to September 2018 has averaged at 12.9 per cent year on year (y- o-y) compared to 10.4 per cent y- o-y last year.

“As for the international sector, the Asean portion will remain as the bulk of this segment and has registered an 8.8 per cent y- o-y growth for the first nine months of 2018, benefitting AirAsia X Bhd.”