KUALA LUMPUR: Following a stronger-than-expected rebound in 2022 passenger arrivals at Malaysian airports, the momentum is expected to accelerate in 2023 as the recovery in tourism continues.
Kenanga Research said in a report it expects tourist arrivals in Malaysia to jump four-fold to 9.6 million in 2023 from an estimated 2.5 million in 2022.
It said this was on the back of a return in both business and leisure air travel globally as the pandemic comes to an end as well as the revocation of all quarantine and testing requirements in Malaysia from Aug 1, 2022.
In addition, it said the gradual reopening of China would further boost numbers as the country has historically contributed to an estimated 12% of tourist arrivals in Malaysia.
On the back of this tourist growth, Kenanga said Malaysia Airports Holdings Bhd
's (MAHB) passenger throughput, which includes Istanbul's Sabiha Gökçen International Airport (SGIA), is projected to rise over the coming years.
The research firm projects a system-wide passenger throughput of 116 million for MAHB in 2023, up 38% from 84 million in 2022. For 2024, it forecasts a further increase in passenger throughput to 126 million.
"We expect traffic trajectory to grow in subsequent months as airlines continue to reactivate more aircraft to match increasing demand.
"Amplifying traffic growth trajectory is aircraft movements that are pointing towards increased medium and long haul flights to Perth, Sydney and Auckland, Southeast Asia and South Asia destinations," it added.
Kenanga noted that KL International Airport recently saw the return of Kuwait Airways after a seven-year hiatus.
Two other foreign airlines, KLM Royal Dutch Airlines and All Nippon Airways, will resume non-stop flight operations to Amsterdam and Tokyo respectively after temporarily ceasing operations due to the Covid-19 pandemic.
Meanwhile, the research firm said Malaysia Airlines has also increased its flight frequency to Tokyo from November 2022 in anticipation of the surge in travel demand following the reopening of Japan's borders to international travellers.
As for AirAsia Group, Kenanga said it is focusing on its medium haul operations by increasing its Malaysia AirAsia X flights to 44 weekly across 10 routes commencing November 2022.
Kenanga made adjustments to its MAHB forecasts in its latest company update, narrowing its FY22 forecast net loss by 6% and raising FY23 net profit by 3%.
Subsequently, the research firm raised its target price by 15% to RM7 from RM6.10 previously to remain "market perform" on the stock.
In 2022, MAHB's system-wide passenger throughout of 84 million beat Kenanga's expectations by 8%. The research firm said this accounted for 60% of the operator's pre-Covid 2019 levels.
According to Kenanga, MAHB's Malaysia operations recorded 53 million passengers, or half of 2019 levels, in 2022, driven by airlines average load factor of 71% compared with 52% in 2021.
Similarly, SGIA recorded 31 million passengers, accounting for 87% of the 2019 level.
However, its international passenger movements surpassed the 2019 level by 10.4%, while domestic passenger movements were at 15.5 million or 71.2% of the 2019 level.
