MAHBs’ losses narrow in 3Q, expected to pick up with VTL
KUCHING: Malaysia Airports Holdings Bhd’s (MAHB) net loss narrowed to RM182.31 million in the third quarter (3Q) ended Sept 30, 2021 from a net loss of RM319.71 million in the corresponding period in 2020.
Revenue improved to RM461.33 million from RM396.69 million previously, driven by higher passenger volume for its Turkey operations due to the relaxation of border and intercity travel.
“Turkey operations showed signs towards normalisation as passenger traffic increased from 4.9 million to 8.9 million passengers.
“Passenger traffic for the Malaysia operations contracted by 77.8 per cent to 1.0 million passengers compared to 4.5 million passengers in the corresponding quarter last year, impacted by the continuation of the Movement Control Order (MCO) and renewed total lockdown from June 1, 2021.
“Overall, Malaysia recorded a decrease in revenue by 40.3 per cent to RM151.3 million,” the airport operator said in a filing with Bursa Malaysia.
It also said MAHB’s network of airports recorded 21.9 million passengers from Jan 1, 2021 to Sept 30, 2021, a contraction of 39.7 per cent over the corresponding period in the prior year.
During the same period, the group’s traffic for international and domestic passengers contracted by 51.1 per cent and 33.0 per cent, respectively.
Correspondingly, the group’s aircraft movements decreased by 32.2 per cent with both international and domestic aircraft movements decreasing by 28.6 per cent and 33.8 per cent, respectively.
The team with Kenanga Investment Bank Bhd (Kenanga Research) saw that Malaysia domestic traffic performance registered encouraging improvements after the launch of Langkawi travel bubble programme from September 16, 2021.
“The government announcement on the reopening of interstate borders and the relaxed rules for fully vaccinated Malaysian residents to travel abroad from Oct 11 onwards is positive news for the aviation sector to restart with prospects for a gradual recovery,” it detailled in its report.
“Separately, the recently announced Malaysia and Singapore Vaccinated Travel Lane (VTL) between Changi Airport and KLIA flight from Singapore saw positive responses receiving six VTL flights carrying over 1,300 passengers from Singapore.”
AmInvestment Bank Bhd (AmInvestment Bank) opined that MAHB’s commercial reset and new rental model have been rolled out successfully, attracting the participation from highly sought-after brands and reputable companies, stimulating high capex investment by tenants of up to RM314.5 million, as well as retaining existing tenants.
To date, it has approximately onboarded 50 per cent tenants with its commercial reset programme, and another 49 new shops and brands expected to come in.
“It is in the midst of unlocking an additional 20 per cent of commercial space in KLIA. At present, the occupancy rate stands at 67 per cent against 90 pre-pandemic.
“While commercial rental revenues could be muted amidst low passenger traffic at the airport now, MAHB is confident that the new revenue model tied to passenger traffic will offer it more upside over the long run as the air travel market normalises.”
Kenanga Research saw that MAHB has put in place multiple initiatives to reconnect the air traffic at its airport as the pandemic has largely move into endemic phase.
“Some of the initiatives include the network reconnecting programme, which has seen 36 airlines resumed operations in Malaysia, and another 27 airlines expected to resume by the end of this year.
“It is also pursuing 22 new city pairs under the airline incentives programme as an effort to expand the air traffic network coverage for its airports.”
MAHB is also expected to be able to benefit from the joint programme with Tourism Malaysia on the International Tourism Development programme, which has seen RM8 million being allocated under the initiative.