MAVCOM: Malaysia to hit 100 million passenger mark in 2018

PETALING JAYA: The Malaysian Aviation Commission (MAVCOM) expects a 6.5% to 7% growth in the number of passengers to surpass the 100 million mark for the first time in 2018.
This compares with 99.1 million passengers recorded in 2017, representing an 8.1% growth.
MAVCOM said in a statement that the aviation industry marked a significant turnaround with its operating profit increasing to RM1.6 billion in 2017, from an operating loss of RM500 million in 2014.
As at end-December 2017, the market capitalisation of aviation companies increased 38.4% to RM25.6 billion from RM18.5 billion at the beginning of 2014, outperforming the KLCI by 50.5% between 2014 and 2017. The solid growth was supported by strong demand, improved seat inventory control and a low fuel price environment.
MAVCOM noted that Malaysian carriers increased their revenue per available seat kilometre (RASK) at a greater rate than their cost per available seat kilometre (CASK), which enabled the negative spread between CASK and RASK to decrease by 42.5% in 2017 from the previous year.
However, as crude oil price is expected to increase 10.7% to 30.5% in 2018 based on forecasts by international agencies including the International Air Transport Association (IATA), MAVCOM said this may exert downward pressure on airlines' profitability amid the competitive low-fare environment.
MAVCOM executive chairman Tan Sri Abdullah Ahmad said on the whole, the Malaysian aviation industry appears to be well positioned for growth despite narrowing margins and rising oil prices.
"The last two years have been strong from an industry standpoint, as shown by passenger traffic growth, industry operating profitability and the market capitalisation of public-listed aviation companies during this timescale, especially in comparison to the immediate period before. Challenges remain, but MAVCOM is optimistic that the positive industry performance of recent years will continue in 2018."
In terms of connecting passengers, Kuala Lumpur International Airport is the second largest international hub airport in Asean after Singapore Changi Airport.
Malaysia's air connectivity in 2017 improved with an addition of eight international destinations and about 360,000 seats.