KUALA LUMPUR: Malaysia is expected to receive an influx of traffic from China in the second-half this year due to long holidays among Chinese tourists.
MIDF Research said Chinese tourists represent a significant portion of international traffic in the country, attributing to the relaxation of visa permit to Malaysia and demographic factors.
“The occurrence of golden week in October is also expected to encourage outbound travel among Chinese tourists.
“Consequently, revenue from retail segments is expected to benefit given higher footfalls expected in October in airports operated by MAHB,” it said in a report reviewing passenger traffic at local and foreign airports owned or managed by Malaysia Airports Holdings Bhd.
MIDF Research believed both low-cost short and medium long haul segments to remain buoyant based on its ability to withstand higher fuel prices in the past years.
“The bottom line earnings will be underpinned by airlines continuous improvement in operational cost and its ability to grow operating revenue.”
Low-cost carriers (LCCs) operation is expected to benefit significantly given the encouraging trend of passenger traffic at the Kuala Lumpur International Airport 2 (KLIA2).
“This includes AirAsia and AirAsia X which command considerable market share in the airport for both domestic and international sectors. We opine that AirAsia will most likely recorded strong operational statistic in the second-quarter (Q2) 2018,” MIDF Research said.
MAHB on Tuesday reported that KLIA passenger movements had grown 4.3 per cent to 29.7 million passengers in first-half (1H) 2018. The bulk of passenger derived from international traffic, recording 21.6 million passengers.
MAHB said Asean sector had risen 6.2 per cent with 10.2 million passengers, while non-Asean sector increased 5.3 per cent with 11.4 million passengers.
MIDF Research raised its optimism on the low-cost airlines business.
It kept its “buy”’ call on AirAsia and AirAsia X with a target price of RM4.87 and RM0.47 respectively.
It also has a “buy” call on MAHB with a target price of RM9.88.
“Consequently, with a sanguine outlook on passenger traffic, MAHB is poised to benefit as the main airport operator in Malaysia.”
MAHB’s network of airports including Istanbul Istanbul Sabiha Gokcen International Airport registered 5.2 per cent growth to 64.9 million passengers in 1H this year.
International traffic improved 8.3 per cent with 30.8 million passengers, while domestic passengers increased 2.5 per cent with 34.2 million passengers.
Aircraft movements grew 2.6 per cent with 8.7 per cent growth in international movements while the domestic sector declined 1.1 per cent over June 2017.
Airports in Malaysia handled by MAHB registered a 3.0 per cent growth to 48.7 million passenger movements in 1H 2018. International sector registered 25.5 million passengers with 7.5 per cent growth while domestic sector declined 1.6 per cent with 23.2 million passengers.
Meanwhile, MAHB’s network of airports (including Istanbul SGIA) handled 11.2 million passengers, registering a growth of 9.5 per cent in June 2018.
International traffic recorded 5.1 million passengers with a year-on-year (YoY) growth of 9.0 per cent while domestic traffic grew 10.0 per cent to 6.1 million passengers.
On the local front, the 39 airports handled by MAHB registered 8.4 million passengers in June 2018, posting 9.7 per cent YoY growth over June 2017.
International and domestic sectors each recorded 4.2 million passengers with a growth of 8.3 per cent and 11.1 per cent, respectively.