(Updated)

MAHB's turnaround hinges on reopening international borders, says CEO

MAHB's turnaround hinges on reopening international borders, says CEO
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KUALA LUMPUR (Jan 20): Malaysia Airports Holdings Bhd (MAHB), which slipped into the red for the cumulative nine months ended Sept 30, 2020 (9MFY20) due to global travel restrictions amid the Covid-19 pandemic, says its turnaround will depend on how early Malaysia opens its international borders.

“The sooner the government opens the borders, more international travellers will come in and then we should be able to return to profitability pretty fast,” its group chief executive officer Datuk Mohd Shukrie Mohd Salleh (pictured) told a virtual press conference today.

The airport operator swung to a net loss of RM431.17 million for 9MFY20, from a net profit of RM507.53 million a year ago. MAHB’s 4QFY20 results are due to be released on Feb 26.

“As far as MAHB is concerned, what is more important to us is international traffic. Domestic traffic is not enough to cover our cost of operations,” he said.

He cited MAHB’s average cost per passenger of between RM20 and RM25. However, a domestic passenger is only paying RM11 in passenger service charge. “So relying solely on domestic travellers will not help us to cross the profitability threshold, but it should be sufficient for us to have positive cash from operations.”

Mohd Shukrie said MAHB, which manages 39 airports in the country, does not foresee a return to pre-pandemic level before 2023. “For international traffic, we foresee that it will return to pre-Covid-19 level by 2024 and at best, 2023. For domestic traffic, we expect to see a return in traffic by next year and latest by 2023.”

He also pointed out that no airlines had ceased operations in 2020.

“In fact, about 60% of airlines at the Kuala Lumpur International Airport (KLIA) had resumed their operations during the year albeit with reduced frequencies. We had welcomed Taiwan-based Starlux Airlines to Penang International Airport in 2020, and recently, on Jan 5, 2021, we welcomed its inaugural flight to KLIA for the Kuala Lumpur–Taipei route.

“Meanwhile, we welcomed four new cargo airlines in 2020 namely YTO Airlines, Ethiopian Cargo, Cargolux Italia and My Jet Xpress,” he added.

MAHB shares closed down four sen or 0.72% at RM5.51, bringing a market capitalisation of RM9.13 billion. A total of 1.57 million shares were done.

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