KUALA LUMPUR, Dec 10 ― The country's air passenger traffic is expected to grow by five to six per cent next year, driven by Visit Malaysia 2020 and a 3.2 per cent year-on-year (y-o-y) increase in domestic seat capacity growth, said the Malaysian Aviation Commission (Mavcom).

This will bring the total traffic figure to between 114.9 million and 116.0 million passengers, the regulator said.

"The forecast growth in 2020 follows Mavcom's revised 2019 passenger traffic forecast to between 109.1 million and 109.7 million, being a growth of between 6.4 and 7.0 per cent y-o-y,” it said in a statement today.

Mavcom had earlier projected only a 2.9 to 4.1 per cent growth y-o-y for 2019. Actual traffic for the first half (H1) of this year jumped 5.2 per cent y-o-y to 53.1 million.

The projected growth was published in Mavcom’s fifth bi-annual industry report, Waypoint, which gives an overview of the Malaysian aviation sector’s performance for H1 2019 as well as prospects for 2020.

During H1 2019, Malaysia’s tourist arrivals by air surged by 8.8 per cent y-o-y to 4.8 million, higher than the growth recorded for total tourist arrivals by all modes of transport of 4.9 per cent y-o-y, which resulted in total arrivals of 13.4 million.

"This increase was mainly as a result of higher tourist arrivals from Indonesia, China, and Thailand, which offset the decline in tourist arrivals from Singapore and Brunei.

"Collectively, these five countries constituted 78 per cent of the total tourist arrivals in H1 2019,” it said.

On the average operating profit margin of Malaysian carriers, Mavcom said it fell to 0.3 per cent y-o-y in the first six months of this year on the back of rising costs.

However, the average cost per available seat kilometre (CASK) increased 5.9 per cent y-o-y to 17.9 sen, while revenue per available seat kilometre (RASK) fell by 2.2 per cent to 15.9 sen, it said.

"Mavcom takes note of the greater RASK-CASK negative spread in H1 2019 compared to the corresponding period in 2018, reflecting decreasing profitability of Malaysian carriers and a challenging operating environment in Malaysia,” said the regulator of civil aviation-related economic and commercial matters.

It added that stronger domestic passenger traffic growth relative to international passenger traffic growth could also influence aerodrome operators’ earnings in 2020 as passengers incur a lower passenger service charge for domestic travel, it added.

As for seat capacity by Malaysian carriers, Mavcom expects it to grow by 2.0 per cent in 2020, slower than the 4.3 per cent recorded in 2019.

Subsequently, average fares by the carriers are forecast to remain flat or rise slightly due to slower growth in capacity, which may also enable local carriers to improve their load factors, it added. ― Bernama