Can low-cost Malaysian airlines help post-pandemic tourism recovery?

Experts believe that low-cost carriers can help with post-pandemic tourism recovery. — Filepic

Low-cost carriers could help lead post-pandemic tourism recovery and help grow demand for travel.

Frugal cost-cutting measures taken and operational responsiveness will see these carriers move quickly to absorb pent-up travel demand and capitalise on any opportunities, says data and analytics company GlobalData.

“Low-cost carriers have trimmed costs well. Although all airlines have drastically reduced costs to weather the storm created by Covid-19, it is evident that low-cost carriers have managed to push already low-cost bases even lower, ” said GlobalData tourism analyst Gus Gardner.

He added that low-cost carriers can operate cash-positive routes with a lower load factor, which is important with the current low levels of demand.

GlobalData also highlighted that the Covid-19 pandemic has amplified people’s concerns around personal finances.

The Covid-19 Recovery Survey showed that globally, a staggering 87% of respondents were “extremely”, “quite”, or “slightly” concerned about their personal financial position.

Lower airfares, according to Gardner, will be an important factor in attracting travellers to fly with an airline.

“The low fares offered by low-cost carriers will better cater to the increased need of affordability. Cost-cutting measures will allow low-cost carriers to push ticket prices to new lows if necessary and still break-even, ” he said.

Gardner added that travellers would be looking at shorter distance trips once it is safe to travel again.

“With leisure travel most likely to rebound first and low-cost carrier’s short distance, point-to-point networks will better suit pandemic-cautious travellers looking for trips closer to home, ” he explained.

Upbeat sentiment

In a separate development, news of the vaccine rollout in Malaysia has been greeted positively by local aviation stakeholders.

AirAsia said the vaccine rollout is the first key indicator of a global travel reboot in the near future.

AirAsia Group chief executive officer Tan Sri Tony Fernandes said the airline has put in place digital initiatives and innovative technologies that would make air travel safer and more seamless post-Covid-19.

“Better testing, leisure travel bubbles, anti veil medicines and importantly, digital health passports providing a single tool for health records across Asean and beyond, are also coming soon, to support the global travel recovery, ” he said in a statement.

Meanwhile, Malaysia Airports is anticipating air traffic numbers to increase with the vaccine rollout.

“Since the start of the pandemic, we have been vigilant in ensuring the highest safety standards at the airport so that people can travel safely. The national vaccination programme will certainly help our efforts, ” said Malaysia Airports group chief executive officer Datuk Mohd Shukrie Mohd Salleh.

“With the programme in place, we also hope that more travel bubbles can be implemented similar to the one that will happen between Indonesia and Malaysia, perhaps with other countries within South-East Asia, ” he said.

Nearly 50% of international traffic to the country is from the region before Covid-19.

Air traffic data for January 2021 showed that border closures and re-imposition of domestic travel restrictions once again adversely affected air traffic movements that had been showing initial signs of gradual recovery after the easing of travel restrictions in the second half of 2020.

Passenger traffic movements in January 2021 dropped by about 30% compared to the preceding month, whereas it had increased by more than 240% when comparing December against November 2020.