Air travel soars again | Free Malaysia Today (FMT)

The air travel sector is slowing as post-pandemic travel restrictions are lifted, but it can still fly into the wind.

PETALING JAYA: As movement restrictions have mostly been lifted worldwide, the lockdown fatigue travel bug is biting again.

Airlines around the world are responding by resuming flights on traditional routes as well as introducing new ones.

And to be the first to lift, carriers everywhere have conjured up new tricks or recycled old ones.

For example, Singapore’s Jetstar had a Children’s Day contest that promised a family trip to Phuket for the winner, while Air France launched a quiz on Sept. 26 that offered a free trip for two to New York for all correct answers , according to the airline industry news website. Travel radar.

Back in Malaysia, the two main flag carriers – full-service Malaysia Airlines and low-cost carrier AirAsia – are quickly filling up seats in their cabins again.

For both, already established planes fly, and in addition to returning to their traditional destinations, they also fly to new ones.

For example, Malaysia Airlines now flies twice a day to London, up from just 11 flights a week in March.

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Its capacity has reached 76% of its 2019 level and is expected to touch 82% by the end of the year, as it adds new destinations in its flight path, such as Doha and Haneda, Tokyo.

The four Capital A Bhd airlines, namely AirAsia Malaysia, AirAsia Indonesia, AirAsia Thailand and AirAsia Philippines, have not only resumed the traditional routes that were suspended during the Covid-19 pandemic, but have also taken off to new destinations.

The passenger load factor in its four airlines increased to 9.9 million in the third quarter of this year (Q3 2022), up 54% from its pre-pandemic level and up 36% quarter-on-quarter.

Data from Malaysia Airports Holdings Bhd (MAHB) only reinforces these signs of recovery.

It shows that passenger traffic has recovered quite substantially. As of September 2022, traffic in the domestic segment reached 81% of the level reached in the same month of 2019, while in the international segment it was at 46%.

The recovery in air travel has also brought real benefits to the aerospace sector.

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For example, airlines start taking delivery of new planes. “There is already a backlog of 40,000 aircraft worldwide that airlines are waiting for,” Malaysia Aerospace Industry Association president Naguib Mohd Nor told FMT Business.

In the area of ​​maintenance, business has increased because more planes are in the air again. “Conditions are almost back to pre-Covid-19 levels,” Naguib said.

MIDF Amanah Investment Bank Bhd’s research unit told FMT Business that on a cumulative basis, Malaysia’s domestic traffic recovered to 67% and international traffic to 23% from the level recorded in September 2019.

However, it is still expected against the wind. “China’s zero Covid-19 policy makes it a laggard, as the North Asian (including China) sector has historically contributed close to 25% of traffic at KLIA.

Chinese tourists are also the biggest spenders at duty-free shops, the research unit said.

The weaker ringgit may also pose a challenge as jet fuel is priced in US dollars, MIDF said.

For Capital A, for example, close to 50% of the aviation group’s expenses are denominated in US dollars, it said, but a downtrend in crude oil prices could soften the financial impact.

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On the other hand, there is still no evidence of a slowdown in air travel despite expectations of a recession going forward.

Even with fares raised as airlines began imposing fuel charges earlier in the year, passenger traffic continued to recover. MIDF attributed this to a shift in consumption from goods to services after the lockdown.

For now, there is optimism ahead.

In its latest analysis published this month, consulting services provider Bain & Company forecasts revenue for the airline industry worldwide will reach US$525 billion (RM2.4 trillion) this year, 84% of the US$666 billion (RM3. 1 trillion) reached in 2019.

It said that while travel between Europe and North America is expected to continue to outpace international travel to and from Asia, growth in Europe could slow over the next 18 months.

All the same, mounting recession in key economies and turbulence in the oil market could spark a recovery.


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