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PETALING JAYA: The Malaysian Aviation Commission (Mavcom) has cut its forecast for 2021 passenger traffic and now expects it to contract between 77% and 80.2% year-on-year (y-o-y) to 5.3–6.1 million passengers, significantly lower than the 18.9–20.6 million passengers forecast in April 2021, after taking into consideration lower load factor and longer period of seat capacity recovery by airlines.

Following the implementation of the movement control orders between Q4’20 and Q2’21, Mavcom reported that total passenger traffic in Q2’21 stood at 1.3 million, the lowest since Q2’20, which saw 800,000 passengers. This represents growth of 62% y-o-y due to a low base effect. Despite the drop in passenger traffic, an increase in domestic, short-haul travel is anticipated with the relaxation of movement restrictions for fully vaccinated passengers.

While muted passenger traffic numbers persist, the commission highlighted that Malaysia’s total cargo volume expanded by 80.4% y-o-y in Q2’21 due to high demand for vaccines, medical equipment, personal protective equipment, electrical and electronic components as well as the solid growth seen in e-commerce. Mavcom anticipates air cargo traffic in 2021 to expand between 26.5% and 28.2% y-o-y and recover to pre-crisis levels.

Despite the ongoing pandemic, Mavcom reported that Malaysia’s main cargo players have undertaken route expansions that may indicate a further increase in Malaysia’s cargo volume in the near future. Raya Airways and World Cargo Airline also upgraded their licences from Air Service Permits to Air Service Licences.

As of June 30, 2021, Mavcom approved all of the 34 Air Traffic Rights (ATR) applications received in H1’21, reflecting an increase of 25.9% y-o-y compared to the 27 ATR applications in H1’20.

International routes received 26 ATR allocations with the largest share of ATR in H1’21 allocated for routes to China at 38.2%. This was followed by allocations to domestic routes and the Asean region at 23.5% each. H1’21 also marked the second consecutive half without expiry of any airline’s ATR portfolio, following Mavcom’s decision to ease the condition which automatically revokes unutilised ATRs within six months from the date of the ATR approval.

Mavcom executive chairman Datuk Seri Saripuddin Kasim said the aviation industry continues to be the hardest hit by the Covid-19 pandemic. While trends indicate potential increase in domestic travel as the nation moves closer to reaching herd immunity and travel restrictions are relaxed for fully vaccinated passengers, the recovery rate of the sector remains uncertain.

“Beyond the pandemic, Mavcom is working hard, in consultation with industry players, to prepare for the jumpstart of the aviation sector. Nonetheless, it is crucial for all stakeholders to be prepared for a new market that will be dominated by price-sensitive leisure travellers. In light of this, the commission expects cost containment and reduction to become top priorities for airlines as well as airport operators.”

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