PETALING JAYA: Higher demand for both business and leisure air travel is expected to continue this year, with tourist arrivals projected to hit 31 million, up 15% from an estimated 27 million last year.
This will benefit airlines like Capital A Bhd
, airport operator Malaysia Airports Holdings Bhd (MAHB) and other travel-related services.
Kenanga Research said its forecast of 31 million was in line with Tourism Malaysia’s target. It has a “neutral” stance on the aviation sector.
A key driver is Chinese tourists, who historically account for 12% of total tourist arrivals in Malaysia.
Specifically, the introduction of a 30-day visa-free entry for China and India led to an 82% increase in arrivals from these countries during the December 2023-September 2024 period compared to February-November 2023.
In September, China and India’s recovery stood at 123% and 90%, respectively, against 2019’s pre-pandemic levels.
Kenanga Research said these factors should drive growth in MAHB’s passenger throughput and Capital A’s passenger demand in 2025, with MAHB’s passenger traffic forecasted to rise 11% to 146 million.
MAHB is optimistic about a resurgence in passenger numbers and connectivity, driven by the introduction of new airlines and services at key airports such as Kuala Lumpur International Airport (KLIA), Penang, Kota Kinabalu and Langkawi.
The commencement of new airlines – including Air India to Delhi, 9 Air to Guiyang (with a weekly frequency), and Lucky Air to Lijiang City (also weekly) – partly contributed to growth in international passenger movement from China and India.
The growth was further supported by AirAsia’s new routes from KLIA to Labuan Bajo and Lucknow, while Malaysia Airlines has begun daily flights to Da Nang.
Additionally, Subang Airport’s proximity to the Kuala Lumpur city centre will reduce travel times, benefitting business travellers and tourists.
The reactivated rail link between Subang and Kuala Lumpur will also ensure seamless transfers.
Regarding MAHB’s privatisation status, 84% acceptance has been achieved.
Once the acceptance level hits the 90% mark, the consortium will be able to delist the airport operator.
To capitalise on the robust demand, Capital A is prioritising the active expansion of its capacity and network.
Passenger throughput recovery is gaining traction and is anticipated to reach 84% of pre-Covid levels.
Capital A’s fleet expansion and the launch of 18 new routes will boost capacity, both domestically in Malaysia and Thailand, and on international sectors in Indonesia.
This expansion is well-timed to capture the strong travel demand, especially during peak periods in China and India, as well as the global year-end festivities, positioning the company to capitalise on these market opportunities and fuel its growth trajectory, Kenanga Research said.
