Virus slows passenger traffic towards end of January – MAHB
KUCHING: Passenger traffic remains strong in January 2020 albeit declining towards the end, dragged by the emergence of the 2019 Novel Coronavirus (2019-nCoV).
Figures for January 2020’s passenger traffic for airports under Malaysia Airport Holdings Bhd (MAHB) increased by 6.6 per cent year on year (y-oy) to 8.9 million passengers due to the festive season.
Nevertheless, both international and domestic passenger traffic showed a declining trend after the Chinese New Year break following the coronavirus outbreak in China.
“The same trend was also observed in passenger transport volumes in China during this year’s Chinese New Year period,” said analysts at MIDF Amanah Investment Bank Bhd ( MIDF Research) in a note yesterday.
“This was in contrast with last year’s trend which peaked towards the end of January before the Chinese New Year break took place on February 5 and 6. As such, average load factors in January 2020 had dropped 2.4 percentage points from a year ago to 71 per cent.”
It went on to note that domestic traffic growth outpaced international traffic growth in Malaysia.
This comes as figures for domestic traffic for airports in January 2020 continued its upward trend, increasing by 8.9 per cent y-o-y to 4.3 million passengers.
“The bulk of the growth was attributable to the 17.6 per cent jump in domestic traffic at KLIA Main Terminal. We opine that this was due to the shift in airlines capacity from the international to the domestic sector,” MIDF Research added.
“Meanwhile, international passenger traffic for Malaysian operations increased by 4.7 per cen y-o-y to 4.7 million passengers. KLIA Main Terminal
This was in contrast with last year’s trend which peaked towards the end of January before the Chinese New Year break took place on February 5 and 6. As such, average load factors in January 2020 had dropped 2.4 percentage points from a year ago to 71 per cent. MIDF Research
was also the main contributor for international traffic with a 5.3 per cent y-o-y increase.
“We opine that klia2 experienced a smaller growth in international traffic of three per cent y-o-y partly due to the suspension of AirAsia flights from and to Wuhan (via Kota Kinabalu, Bangkok and Phuket) announced on January 23 and effective until February 29, 2020.
“In addition, AirAsia passengers travelling to mainland China, Hong Kong and Macao are given the option to obtain a credit account or a full refund until March 1,2020.”
These led the research firm to expect a blip in February’s passenger growth especially for international traffic.
“We expect a drop in February 2020’s passenger traffic is inevitable at this point. Assuming that the average daily passenger traffic remains around 140,000 passengers per day for international and 130,000 per day for domestic in February, the total passenger movement will decline by approximately 3.8 per cent,” it estimated.
“As such, it will be necessary to relook at our annual passenger traffic forecast for MAHB’s Malaysian airports. We are assuming that the coronavirus outbreak will continue until April or May 2020 amidst China’s efforts to contain the coronavirus outbreak.
“Therefore, we are estimating a reduction by 15 to 20 per cent from normal levels in passengers coming from countries such as China and Singapore from February to May 2020. This brings our revised annual passenger growth forecast for MAHB’s Malaysian airports to a more conservative figure of 109.3 million for FY20.”
While there are concerns on the coronavirus particularly in Asia, MIDF Research underscored Malaysia being the third best Asian country in terms of the level of preparedness for a major infectious disease outbreak according to the Economist Intelligence Unit.
“Assuming that thee coronavirus outbreak would last in the next two to three months, we could still expect traction from other countries namely India, which so far has only three confirmed cases of coronavirus as of late,” it added.
“Apart from Chinese citizens, the 15-day visa free travel has also been extended for Indian nationals for the whole of 2020, coinciding with the Visit Malaysia Year campaign. Moreover, tourist arrivals from India in Malaysia reached 0.6 million, almost comparable to South Korea and 52.2 per cent higher than Japan.
“Other growth factors would include direct connectivity seen from international airlines flight to locations such as Langkawi. As such, we still believe that MAHB passenger numbers can meet the 109.3 million mark in 2020 at the current juncture, assuming a growth rate of 3.9 per cent.”