Mavcom sees passenger traffic for 2020 falling by half to 54.3m

MavCom said 19.6 million passengers were recorded in January to May of 2020, which reflected a drop of 55.2% YoY in passenger traffic. File pic of the KLIA in early April.

KUALA LUMPUR: The Malaysian Aviation Commission (MavCom) lowered its outlook for passenger traffic for this year due to the travel curbs imposed by countries due to the Covid-19 pandemic and ensuing cancellations.

It said on Friday the decline in passenger traffic would be worse than earlier forecast in its March 2020 edition of Waypoint where it had earlier expected a contraction of between 36.2% and 38.1% year-on-year (YoY) due to the pandemic.

“Following recent developments, the MavCom revised its forecast to a decrease of between 48.7% YoY to 50.3% YoY, which translates to between 54.3 million and 56.0 million passengers this year, ” it said.

MavCom said 19.6 million passengers were recorded in January to May of 2020, which reflected a drop of 55.2% YoY in passenger traffic.

It attributed the sharp fall due to travel curbs imposed by countries to contain the spread of Covid-19. This includes the implementation of the nationwide Movement Control Order (MCO) in Malaysia effective March 18.

These restrictions, contributed to the cancellation of flights by both Malaysian and foreign carriers, with many passengers either unable and some choosing not to travel by air.

“MavCom estimates a cancellation of 35.2% in domestic seats and 42.9% in international seats scheduled for 2020, equivalent to a total of 44.8 million seats.

“As at early June 2020,38.8 million seats had already been cancelled by local and foreign carriers, higher than MavCom’s previous estimate of 31 million seat cancellations in 2020, ” it said.

Carriers are expected to continue adjusting their seat capacity in response to the many factors surrounding travel demand and restrictions.

As at early June 2020, Malaysian carriers cancelled a total of 29.6 million seats in 2020 compared to 28.3 million seats at end-May 2020.

Likewise, foreign carriers operating to and from Malaysia are also reducing their seat capacity – a total of 9.2 million seats have been cancelled in 2020 as at early June compared to 8.5 million at end-May.

Consequently, the revenue-at-risk for 2020 by Malaysian and foreign carriers is estimated to be RM11.3bil and RM4.6bil, respectively (previous estimates: RM6.8bil and RM5bil), which collectively represents 51.1% of estimated total airfare revenue in 2019.

As for aerodrome operators, MavCom estimates that revenue derived from Passenger Service Charges (PSC) that are at risk is approximately RM500mil (previous estimate: RM400mil). This amount represents 33.4 per cent of total PSC revenue in 2019.

MavCom executive chairman Datuk Seri Saripuddin Kassim said the impact of Covid-19 on the aviation industry has been extremely severe, and with no comparable precedent, the rate of recovery for the industry will be difficult to predict.

“The current relaxation of movement restrictions within Malaysia, however, should facilitate faster recovery for the domestic market.

“Immigration controls and quarantine measures in Malaysia and elsewhere, alongside passenger willingness to travel by air during this period, will also influence how quickly the overall industry will return to pre-Covid-19 levels.

“The safe re-introduction of international travel and the adoption of the International Civil Aviation Organization (ICAO)-recommended safety measures vis-à-vis managing Covid-19 for air travel could go some way towards reinvigorating the industry.”

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