Aviation passenger traffic in 1Q24 recovers to 86 pct

Malaysia’s aviation passenger traffic has recovered to 86 per cent of pre-pandemic levels during the first quarter of 2024 (1Q24) with monthly passenger traffic staying above 7 million in March for two months in a row.

In a sector report, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) guided that this was an optimistic development as March passenger traffic is historically one of the lowest months due to the Ramadan month.

“Notably, last month (March) boasted the highest load factors to date, with international flights reaching 81 per cent and domestic flights reaching 79 per cent,” said the research arm.

For the quarter under review, it was reported that there were 1,386 more weekly flights than in 1Q23 thanks due new airline operations from Air Macua, Loong Air, Turkmenistan and Flydubai.

“During the quarter, Iraqi Airways re-established its presence in Malaysia, while existing airlines resumed their operations to previously served markets and introduced new services.

“Among the new services from Kuala Lumpur (KUL) operated by foreign airlines are flights to Kunming, Beijing Daxing, and Chengdu, possibly taking advantage of the visafree waiver,” the research arm shared.

And looking ahead, the research arm notes that there are some deterrents to near-term passenger traffic such as the geopolitical conflict in West Asia and the eruption of Mount Ruang, but they guide that they expect both situations to be largely contained.

For the conflict in West Asia, MIDF Research guided that Malaysia’s passenger traffic exposure to Iran is limited while airlines have largely altered flight routes to avoid the affected airspace.

While this minimises disruptions for Malaysia’s passenger traffic, there is still concern that the increase in jet fuel prices airisng from this conflict may lower aviation demand.

“Locally, we find that the impact is partially mitigated by the ongoing implementation of fuel surcharges, and the higher average airfares compared to pre-Covid times, attributed to reduced aircraft availability,” said the research arm.

Meanwhile, the eruption of Indonesia’s Mount Ruang has been a relatively contained impact as most flights have were reinstated and resulted in no actual loss in traffic.

That said, complete resolution may still take some time especially during the recent Eid Holiday.

For the remainder of the year, MIDF Research reckons that passenger traffic will recover fully and see a 2 per cent growth to 2019 pre-pandemic levels.