Domestic tourism to drive air travel

Aviation experts said domestic air travel might gradually recover from June, assuming the government relaxed the Movement Control Order and foreign travellers are not allowed

to freely travel to Malaysia. NSTP/ADI SAFRI

KUALA LUMPUR: Domestic tourism is poised to drive the local air travel industry with the recovery could start as early as June, aviation experts said.

This is amid longer anticipation of full recovery of international passengers returning to Malaysia from 2022.

Aviation experts said domestic air travel might gradually recover from June, assuming the government relaxed the Movement Control Order and foreign travellers are not allowed to freely travel to Malaysia.

In a virtual conference by EU-Malaysia Chamber of Commerce and Industry today, they said international passenger traffic would still be limited due to continued travel restrictions imposed by governments globally.

"We expect domestic air travel to recover between 70 per cent and 80 per cent by this November and December month-on-month (MoM) from 2019's levels to 4.2 million passengers and 4.8 million passengers, respectively," said PricewaterhouseCoopers partner and strategy Edward Clayton.

He said this was based on the majority of Malaysians would move to green zone, which in turn would potentially see local traffic to recover but without international connecting passengers.

Malaysian carriers collectively transported 64 million passengers last year including 28 million in the domestic market and 36 million internationally.

Clayton urged the government to temporarily allow domestic passengers to shop at duty-free outlets at international terminal until foreign traffic returns to normal.

"Retailers sales at airports are badly affected due to significantly reduced in international passengers traffic. We expect around 3,000 international passengers per day or 500,000 traffic from June to December this year at local airports. Duty-free shops are in deep trouble until international passengers return.

"Otherwise, the duty free operators will not survive and they will not be in operation when things return to normal," he added.

Clayton warned that recovery in international traffic might not happen if governments still enforced a 14-day quarantine for passengers.

"As long as the 14-day quarantine period continues, the only people that will travel are those who are returning to their home country, contract foreign workers and students," he said.

Sobie Aviation consultant and independent analyst Brendan Sobie said the local aviation sector was at a critical juncture and looking for a reset.

"They are in need of government support. This is to keep jobs scheme for their employees, where the government takes over the wages of airlines' staff to maintain jobs so that airlines can resume their capacity and growth.

"A country might lose out in the long-run without government support. The airlines have put themselves in hibernation for awhile, especially for the international market. It is expected that demand won't be returning until 2022 to 2023 before we can see a full recovery," he said.

Sobie added that airlines must boost their liquidity while preparing for the inevitability.

He said the government can drive the inbound market by making sure hotel operators can survive during the unprecedented period.

"Hence, it is important to maintain the country's status as the hub and connectivity to attract inbound and tourism as well as in the transit space when that market returns," he added.

-nst online.