Air Travel Demand Will Be Robust In 2025, Driven By Surge In Business, Leisure Travel

KUALA LUMPUR, Jan 9 (Bernama) -- Kenanga Investment Bank Bhd (Kenanga IB) has projected that air travel recovery will remain intact and demand will be robust in 2025, with an estimation of tourist arrivals of 31 million into Malaysia this year, up 15 per cent from an estimated 27 million last year.

In a note today, the investment bank said the numbers surpassed 26.1 million in 2019 before the pandemic, backed by higher demand for both business and leisure air travel.

“A key driver is Chinese tourists that historically contributed to about 12 per cent of total tourist arrivals in Malaysia.

“Specifically, China and India’s 30-day visa-free travel into Malaysia led to an 82 per cent increase in December 2023 to September 2024 vis-a-vis February 2023 to November 2023,” it said. 

Kenanga IB opined that China’s agreement to extend its visa exemption facility for Malaysian citizens until the end of 2025, while Malaysia extended visa exemption for Chinese citizens until the end of 2026, also helped towards passenger growth.

“These should drive growth in airport passenger throughput and Capital A Bhd’s passenger demand in 2025,” it said.

As for Malaysia Airports Holdings Bhd (MAHB), Kenanga IB projected system-wide passenger throughput to rise 11 per cent to 146 million in 2025.

“The group is optimistic about a resurgence in passenger numbers and connectivity, expected to be driven by the introduction of new airlines and services at key airports, including Kuala Lumpur International Airport, Penang, Kota Kinabalu and Langkawi,” it said.

In addition, Kenanga IB said the reactivated rail link between Subang and Kuala Lumpur will ensure seamless transfers, making it easier for passengers to move between the city and the airport.

Regarding Capital A, it said the airline will launch 18 new routes, driving double-digit increases in capacity domestically in Malaysia and Thailand and in international sectors in Indonesia.

“This expansion is well-timed to capture the strong, sustained travel demand during peak periods in China and India, as well as the global year-end festivities, positioning it to capitalise on these market opportunities and fuel growth trajectory,” it added.

Kenanga IB maintained its ‘neutral’ call on the aviation sector in Malaysia.

-- BERNAMA