Malaysia’s Aviation Sector Recovering, Passenger Traffic To Soar In 2025 – Loke

PUTRAJAYA,  Jan 15 (Bernama) -- The Malaysian Aviation Commission (MAVCOM) forecasts that Malaysia’s air passenger traffic will reach between 105.8 million and 112.9 million passengers this year, according to Transport Minister Anthony Loke.

He said this year’s passenger traffic is expected to surpass the previous record of 109.3 million set in 2019, representing an increase of 8.4-15.6 per cent year-on-year (y-o-y).

“This growth is expected to be driven by an increase in airline seat capacity, rising demand for international travel, and overall improvements in household income levels.

“Airlines are also projected to boost their capacity by 15.8 per cent y-o-y in 2025, driven by an expected 21.1 per cent y-o-y growth in domestic travel,” he said during a press conference on Malaysia’s 2024 passenger and cargo traffic performance and the outlook for 2025.

He highlighted that Malaysia's air passenger traffic has now recovered to 90 per cent of pre-pandemic levels, marking a significant rebound from the sharp decline experienced during the COVID-19 pandemic.

In 2020, passenger numbers dropped to 26.7 million, with most movements occurring early in the year before restrictions were imposed.

“The situation worsened in 2021 when international borders were closed,” he added.

However, Loke said the supply chain remains a major challenge for the industry due to the pandemic, causing delays in aircraft manufacturing, component shortages, and global logistics disruptions.

Despite these issues, Malaysian airlines are proactively addressing challenges by reassessing cost structures, optimising maintenance schedules, renegotiating supplier contracts, and reducing overhead expenses.

“Looking ahead to this year, the macroeconomic outlook is positive, with global economic growth projected to remain stable at 3.2 per cent y-o-y, while the ASEAN region’s economy is expected to grow by 4.5 per cent y-o-y.

“Malaysia’s gross domestic product (GDP) is forecasted to grow by 4.5-5.5 per cent y-o-y, while the ringgit is expected to stabilise at RM4.45 against the US dollar.

“Additionally, average fuel costs are anticipated to decline to 26.4 per cent of operating expenses (2024: 28.9 per cent), alleviating some of the cost pressures on airlines,” he said.

Meanwhile, MAVCOM predicts air cargo volumes to grow by 4.5-8.5 per cent y-o-y, supported by economic recovery and continued expansion in the e-commerce sector.

In 2024, Malaysia’s air passenger traffic grew by 14.3 per cent y-o-y to 97.1 million passengers, driven by growth in ASEAN and international segments, which increased by 19.8 per cent and 38.9 per cent, respectively.

This represents 89 per cent of the 2019 pre-pandemic level of 109.3 million passengers.

Domestic passenger traffic grew by 2.2 per cent, supported by factors such as increased airline seat capacity, visa exemptions for travelers from China and India, and improved connectivity to major destinations including China, India, Indonesia, South Korea, Australia, and Gulf countries.

-- BERNAMA