PETALING JAYA: The recovery of Malaysia’s passenger traffic is expected to be delayed due to recent challenges faced by some airlines, including aircraft deliveries and parts, and labour shortages, said MIDF Amanah Investment Bank Bhd.
In its research note, MIDF said it forecasts Malaysia’s passenger traffic at 94%, versus a previous 2024 growth forecast of 102%.
MIDF said in the first half of 2024 (H1 2024), total seat capacity recovery hit 85%, with the average load factor rising to 79% (3.4 percentage points above H1 2019).
“A quick review of July 2024 passenger traffic numbers revealed a strong 92% recovery, fuelled by the international sector, which has been outperforming the domestic sector since November 2023.
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As such, the research firm maintained neutral calls on the aviation sector.
It picked Capital A as the top sector pick with a buy call with a target price (TP) of RM1.06 as its aviation business is less affected by recent disruptions.
In addition, Capital A’s fleet was not significantly cut during the pandemic, allowing it to focus on expansion and creating an opportunity to capitalise on the capacity gaps left by its competitors.
On a separate note, the group is in the final stages and on track to complete its PN17 regularisation plan by Q4 2024, it said.
In H2 2024, Capital A said it plans to reactivate 15 more aircraft and expects eight new deliveries, boosting its operational fleet from 82% in Q2 2024.
Its airlines (excluding Cambodia) recovered 79% of their seat capacity during the recent quarter, with a strong average load factor of 90%.
Capital A guided that passenger traffic is expected to recover to 89% in Q3 2024, supported by an 82% seat capacity recovery.
Meanwhile, passenger throughput recovery in H1 2024 picked up momentum for Malaysia Airports Holdings Bhd, with overall passenger traffic, including operations in Malaysia and Turkey (ISG), reaching 95% of pre-pandemic levels.
It said this recovery was largely fuelled by a +63% rise in international traffic at ISG compared to 2019.
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