KUALA LUMPUR: Malaysia’s air passenger traffic recovery is expected to gather pace in the second half of 2023 (H2’23) to reach 85% of the pre-pandemic levels for the full year, according to MIDF Research.
The non-Asean sector holds considerable growth prospects as more routes are reinstated and flight frequencies increase, it said in a note today following Malaysia Airports Holdings Bhd’s (MAHB) announcement that airports in the country recorded 6.8 million total passenger movements in May 2023, thus surpassing 80% of pre-pandemic levels for the first time.
MIDF Research described the traffic recovery, at 86.2% against May 2019 passenger movements (domestic: 99%, international: 74%), as “impressive”.
However, it remained “neutral” on the aviation sector, saying it made no revisions to its passenger traffic assumptions.
Its overall traffic recovery figure of 85% for 2023 comprises 90% for domestic and 80% for international.
“Potential upsides to our numbers are local airlines rebuilding their fleet and faster-than-expected return of Chinese tourists,” the research house said.
MIDF Research maintained a “buy” on Capital A Bhd (target price: RM1.00) and “neutral” on MAHB (target price: RM7.45)
Meanwhile, Hong Leong Investment Bank (HLIB) Research said air travel is expected to continue to recover as airlines reinstate capacity back to pre-pandemic levels.
“Since the reopening of Malaysia’s borders in April 2022, as well as in other regional Asia-Pacific countries, we have seen a strong recovery for air traffic.
“International traffic recovery (including Asean) continued to gain traction as domestic airlines – Malaysia Airlines and Capital A – are restoring international capacity back to 100% by year-end, similarly for foreign airlines,” it said in a note.
HLIB Research also said that MAHB guided the recovery rate of planned airline seat capacity to remain above 90% for the domestic segment (currently 94.3%) and breach 80% for the international segment (currently 76.4%) by year-end.
It kept its “overweight” rating on the aviation sector with “buy” calls on Capital A (target price: RM1.15) and MAHB (target price: RM8.50). – Bernama
Airports in Malaysia recorded 6.8 million passenger movements in May 2023. – Bernamapic
