This article first appeared in The Edge Financial Daily on April 11, 2018

KUALA LUMPUR: The anticipated higher domestic air passenger movement during this election period has been less promising, said Malaysia Airports Holdings Bhd (MAHB).

Nevertheless, the airport operator is expecting the domestic air passenger demand to pick up from April or at least by May based on high prevailing load factors and airlines’ seat capacity filings for the northern summer season.

In a statement yesterday, MAHB said it sees some moderation in international growth and a positive turnaround in the domestic sector for its Malaysian operations.

“Istanbul Sabiha Gokcen International Airport’s (SGIA) performance will likely maintain its growth momentum for domestic and international passenger traffic in the immediate term,” it added.

The number of passengers passing through the 39 airports that MAHB manages in the country rose 4% to 8.6 million in March 2018 from 8.27 million a year ago.

The international passenger volume recorded an 11.8% year-on-year (y-o-y) increase to 4.5 million passengers in March 2018, while the domestic traffic saw a decline of 3.5% to 4.1 million passengers.

MAHB said overall aircraft movement increased a marginal 0.8% y-o-y in March 2018. International aircraft movement grew 9.6% y-o-y, while domestic movement declined 4.4% y-o-y.

“Average load factor for total traffic slipped 0.4 percentage point to 76.9 in March 2018 over March 2017, caused by the reduction in the domestic sector by 1.7 percentage points,” it added.

Meanwhile, the Kuala Lumpur International Airport (KLIA) in Sepang handled 5.23 million passengers in March 2018, up 6.4% from 4.92 million passengers recorded a year ago. Out of this, the passenger traffic at KLIA Main Terminal fell 1.2% y-o-y to 2.42 million from 2.45 million, offset by klia2’s continued double-digit growth as the terminal saw a 14% y-o-y increase in traffic to 2.82 million in March 2018 from 2.47 million.

System-wide, including its Istanbul operations in Turkey, MAHB handled 6.5% more passengers to 11.33 million in March 2018 compared with 10.64 million in March 2017.

SGIA’s passenger traffic grew 15.2% y-o-y in March 2018 to 2.73 million from 2.37 million.

In the first quarter of 2018 (1Q18), MAHB said airports in Malaysia registered a 3.6% growth in passenger volume to 24.4 million from the year-ago period. International traffic increased 10.8%, while domestic traffic declined 3.5%.

Aircraft movement grew 1.2% y-o-y in 1Q18.

KLIA passenger movement grew 5.7% y-o-y to 15 million passengers in 1Q18. Out of this, KLIA Main Terminal passenger movement declined 1.5%, offset by a 12.7% increase in traffic at klia2 to 8.1 million passengers.

System-wide, including SGIA, MAHB’s airports recorded a growth of 6.9% y-o-y to 32.2 million passengers in 1Q18. Total passenger traffic at SGIA rose 18.6% to 7.8 million passengers in 1Q18.

“Despite the overall credible average load factor of 75.6 percentage points for the domestic sector, there was significant reduction in the domestic aircraft movement for Malaysia by some domestic airlines,” said MAHB.

“AirAsia Bhd contributed a large increase in seat capacity for the domestic sector but it was less than adequate to cover the reductions and cancellations by other airlines,” it added.

The airport operator attributed the decline in domestic passenger movement to large cuts in frequencies and the high traffic base in March 2017 due to the Langkawi International Maritime and Aerospace Exhibition.

MAHB shares closed four sen or 0.45% higher at RM9 yesterday, with a market capitalisation of RM14.93 billion. Over the past 12 months, the counter has gained 25.67%.