Do We Need Tourists?

 In 3Q22, total passenger traffic was 15.6mn, the highest since the start of the pandemic. This improvement brings the 10M22 passenger traffic number to 42.2mn. The domestic traffic in the 3Q22 was equivalent to 71.3% of pre-pandemic levels whilst international traffic was 38.6% of pre-pandemic levels. The stark increase in the passenger traffic number was mainly supported by the full reopening of the Malaysian borders to international travellers on 1 April 2022. 

With more seats scheduled in the 4Q22, the total air passenger traffic for Malaysia in 2022 is now estimated to slightly outperform Malaysian Aviation Commission’s (MAVCOM’s) best-case scenario forecast. The 2022 air passenger traffic is expected to reach between 53.0mn and 55.0mn passengers, growing by 380% YoY to 400% YoY. MAVCOM forecasts Malaysia’s air passenger traffic in 2023 to increase by between 40% YoY and 52% YoY, translating to 74.6mn – 80.8mn passengers. International passenger traffic is expected to experience significant recovery, with routes to key markets gradually being restored beginning 4Q22. 

Source:https://focusmalaysia.my

In 3Q22, Malaysia’s cargo traffic recorded a growth of 12.2% YoY (3Q21: 23.6% YoY) to 5.5bn in 3Q22 (3Q21: 4.9bn). In the first three quarters of 2022, air cargo totalled 16.2bn FTK, with an average of 5.4bn FTK per quarter. For 2023, MAVCOM estimates Malaysia’s air cargo traffic to increase by between 3.0% YoY and 4.8% YoY, translating to 22.4bn – 22.8bn FTK. The expansion will be underpinned by the continued growth of e-commerce and the electrical and electronics (E&E) sector. However, persistent inflationary pressure, rising interest rates, and fear of a recession will be headwinds to watch out for. 

Malaysia is now the sixth-most connected country in ASEAN in 3Q22, while KUL is the fourth-most connected airport in ASEAN. Based on MAVCOM’s Air Connectivity Index, Malaysia’s ranking dropped from fourth to fifth since 2020, and is now down to sixth in 3Q22, with a connectivity score of 46.1. Despite offering more international seats and destinations, Malaysia was ranked lower than Vietnam and the Philippines due to having a higher percentage of international seats scheduled to low-weightage airports. Meanwhile, KUL was the fourth-most connected airport in ASEAN behind SIN, BKK, and MNL, recording a connectivity score of 35.8. Malaysia’s connectivity score was also adversely affected by China’s zero-COVID policy where only a limited number of slots were available to China. 

There are plus and minus points to the report:

-we have not reached 2019 levels;

-KUL has dropped in its ranking;

-Singapore, Bangkok and Manila are ahead of us in connectivity;

-impact of China tourists have not been accounted for or what needs to be done.

The Government is fully aware of the shortcomings but is there a will to change? Our front-liners are from a by-gone generation. They are difficult to genuine tourists, which deters others to come to Malaysia. Do we want tourists or otherwise?

Reference:

Malaysian Aviation Commission, Key highlights, Waypoint, December 2022