Clear skies for aviation sector as Malaysia, other countries reopened borders this year

KUALA LUMPUR, Dec 11 — Finally, a clear sky for Malaysia’s aviation industry in 2022, as the long-awaited post-pandemic recovery is gradually kicking in with industry players busy ramping up their activities to match the pre-pandemic level.

The full reopening of international borders in April after a two-year closure served as a solid springboard for a better growth momentum.

High vaccination rate and falling number of new Covid-19 cases were a major boost.

The momentum was further supported by easing of travel requirements, particularly with the doing away of compulsory Covid-19 tests and mask usage although some countries still have these measurements in place.

Borders reopening

Malaysia reopened its borders for vaccinated travellers on April 2022. The news, announced on March 8, was welcomed by the industry with an increase in flight frequencies, air fare promotions, a spate of hirings and multiple network expansion. There were also many rounds of close engagements with the authorities. The euphoria was palpable.

Within a month of reopening, passenger movements at the Kuala Lumpur International Airport (KLIA) grew by a whopping 1,088.2 per cent year-on-year to 1.98 million passengers, comprising 898,000 international passengers and 1.08 million domestic passengers.

Airport operator Malaysia Airports Holdings Bhd (MAHB) said a total of 55 out of 89, or 62 per cent of foreign airlines resumed operations at all five international airports in Malaysia as of Sept 15.

The active resumption of foreign carriers on international routes contributed to encouraging passenger movements, recording an increase of more than six times across MAHB’s network in Malaysia in the first half of 2022 compared to the same period in 2021.

Low-cost airline AirAsia resumed 45 routes and added three new ones — Penang-Bali, Penang-Phnom Penh and Sibu-Singapore — while its affiliate AirAsia X revived 10 routes. The group’s passenger load factor currently stands at 86 per cent of is pre-Covid level.

Flag carrier Malaysia Airlines Bhd (MAB) increased frequencies to London, Bangkok and Phuket in Thailand, as well as Sydney and Perth in Australia, while reinstating scheduled commercial services to New Delhi, Bangalore, Mumbai, Chennai, and Hyderabad in India.

As of Nov 10, MAB’s load factor stood at 76 per cent of its pre-Covid level and should hit 82 per cent by year-end.

Higher passenger traffic

Air travel saw a strong recovery in the first half of 2022 with passenger traffic rising from an average of 2.90 million in the January-April 2022 period to an average of 4.79 million in May-June 2022 period, a mere two months.

MAHB recently said that passenger traffic across its network of airports, including fully owned Turkish asset the Istanbul Sabiha Gökçen International Airport, grew steadily to 8.3 million passengers in October 2022, reaching 71.1 per cent of its October 2019 level.

Of that total number, Malaysia’s traffic contributed 5.48 million or 65 per cent passengers in October 2022, driven by the progressive relaxation of travel protocols across the region and supported by the airline’s additional frequencies and the introduction of new routes.

Overall, the group recorded 40.67 million passenger movements in its network across the country during the first ten months of 2022, with KLIA contributing a total of 18.82 million passengers.

The pent-up demand for air travel in Malaysia and the Asia Pacific contributed to the uptrend in the Air Traffic Rights (ATR) applications, said Malaysian Aviation Commission (Mavcom) executive chairman Datuk Seri Saripuddin Kasim.

The Commission received a total of 38 ATR applications in the third quarter, an 18.8 per cent increase compared with the previous quarter and a significant 81 per cent jump versus a year ago.

The bulk of the ATR applications were for Asia Pacific destinations with 11 applications for Asean routes, nine for in broader Asia, and four for Australasia destinations.

“We are optimistic that the nation’s aviation industry will continue to achieve progressive recovery,” he said on Nov 8.

Quality vs quantity

The sudden surge in air travel demand caused major disruptions in Malaysia and elsewhere as airlines were unable to meet demand due to bottlenecks in maintenance, repair, and overhaul services and severe staff shortage.

As a result, passengers had to deal with flight cancellations and re-scheduling, airport congestion and baggage delays, among other issues.

Throughout the first half of 2022, a total of 1,251 complaints were registered with MAVCOM, with 99.1 per cent (1,240) of them related to airlines and 0.9 per cent (11) involving airports. Flight rescheduling, flight cancellations, and online booking collectively contributed 46.1 per cent (577) of total complaints filed.

In a bid to expand its fleet size, AirAsia parent Capital A Bhd is considering operations with 300 planes over the next five years against 205 it has currently.

The carrier plans to resume taking deliveries of 362 units of Airbus 321neo starting 2024.

As for MAB, group chief executive officer Captain Izham Ismail reportedly said that the airline is mulling doubling its Boeing 737 Max to 50 in addition to its existing order of 25.

He said MAB has room for another 25 narrowbody aircraft as its long-term fleet development plans envisage operations with at least 50 narrowbody planes by 2030.

New players in town

The local aviation industry also welcomed two new airlines, MyAirlines Sdn Bhd and SKS Airways Sdn Bhd, in the pandemic’s aftermath.

Mavcom granted an initial air service licence to MyAirline, allowing the low-cost carrier to operate as a full-fledged airline in the country for 12 months until Nov 14, 2023.

MyAirline made its maiden flight to Kota Kinabalu International Airport (KKIA) from Kuala Lumpur on Dec 1 via Airbus A320-200. It plans to acquire 50 aircraft in the next five years.

The other new commercial airline is SKS Airways, which had its maiden flight on Jan 25 to Pangkor Island with a DHC6-300 Twin Otter turboprop aircraft. It will focus on domestic short-range flights to island-based destinations to connect Malaysia and beyond in ASEAN and southern China.

Meanwhile, Malindo Air had a rebranding exercise and is now known as Batik Air.

Cat-1 rating restored

The reinstatement of International Aviation Safety Assessment rating to Category 1 (Cat1) by the United States of America’s (US) Federal Aviation Authority (FAA) on Oct 1 was a shot in the arm for Malaysia.

The restoration, three years after the FAA downgrade to Cat-2 in 2019, will strengthen Malaysia’s position as an aviation hub and is an opportunity for local airlines to have a broader repertoire of global destinations, especially in the US.

MAHB managing director Datuk Iskandar Mizal Mahmood said the various positive developments so far were truly commendable considering that these came about when the national aviation industry was dealing with the after-effects of the pandemic.

“The reinstatement will enhance global confidence in the quality of our air navigation services.

“From the airport’s perspective, this will help in our marketing efforts to attract more airlines to operate in Malaysia, thus increasing the country’s network connectivity and hub potential,” he said.

In a bid to strengthen the country’s travel industry, MAHB and AirAsia had mutually agreed to resolve their legal dispute amicably.

What to expect in 2023?

As the recovery momentum in passenger traffic is likely to continue into the new year, there is that anticipation for cheaper fares, the introduction of new routes and extensive marketing activities among the airlines.

To protect passengers and their rights, Mavcom has proposed amending the Malaysian Aviation Consumer Protection Code (MACPC) which includes protection concerning refunds, passenger entitlement, travel passes as well as the removal of cancelled flights from airlines’ booking systems, among others.

Since the MACPC was enforced in 2016, airlines were required to refund travellers for cancelled flights or if flight changes were significant. However, the mode of refund — be it credit or travel voucher . — varies according to arilines.

Under a consultation paper released on Oct 19, the commission further proposed that airlines should offer a refund in the original mode of payment should the airline be unable to render services as promised in the event of a financial crisis such as a debt restructuring exercise, liquidation, or licensing issues.

Mavcom targets to implement the enhanced MACPC in the first quarter of 2023. — Bernama

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