This article first appeared in The Edge Financial Daily, on January 13, 2016.

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) saw 2.7% fewer passengers pass through the 39 airports it manages in the country in December last year, compared with the same month in 2014, its third straight monthly decline since October 2015.

The airports handled 8.06 million passengers last month from 8.29 million in December 2014, dragged down by a drop in domestic and international passengers. International traffic slipped 2.3% to 3.9 million in December 2015 from 3.99 million a year ago, while the number of domestic passengers fell 3% to 4.17 million from 4.29 million.

Kuala Lumpur International Airport (KLIA) in Sepang, Selangor, saw a 12.5% drop in passenger traffic in December last year to 2.12 million from 2.43 million in the year-ago period, with international and domestic traffic falling by 14.2% and 6.9% respectively.

However, klia2 saw 11.6% more passengers passing through its gates in December 2015, recording 2.71 million passengers, compared with 2.43 million passengers in December 2014. Both domestic and international traffic jumped 13% and 8.8% respectively.

Meanwhile, overall aircraft movements also fell 6.4% to 68,967 in December 2015 from 73,656 in December 2014, with international and domestic movements registering a drop of 4.1% and 7.7% respectively.

In a filing with Bursa Malaysia yesterday, the airport operator said, nevertheless, December 2015 continued to register the highest number of passengers for the year, crossing the eight million mark again.

“November and December 2015 traffic performance was better than expected, in spite of the seemingly negative growth (November 2015: -2.7%),” said MAHB.

For the full year, MAHB said the number of passengers grew by a marginal 0.5% to 83.73 million, compared with 83.35 million in 2014, due to a 0.4% decline in international traffic that offset the 1.2% increase in domestic passengers.

“Traffic was affected by frequencies and route cuts, impact from haze, China economic slowdown and unfavourable economic conditions at home,” said the group.

For 2016, MAHB said based on the prevailing factors, it expects passenger traffic for its Malaysian airports to increase by 2.5% above 2015 passenger numbers to 86 million.

“Aircraft movements are expected to grow along passenger growth at 2.4% in 2016,” it added.

Last year, KLIA handled 9.2% fewer passengers to 22.62 million from 24.9 million in 2014,  partly due to route cuts by Malaysia Airlines and the shift of Jetstar Asia, Malindo Air and Lion Air’s operations to klia2. 

klia2, however, posted a 9.5% increase in the number of passengers handled to 26.31 million from 24.03 million the previous year, contributed mainly by AirAsia’s and Malindo Air’s growth.

“Given the backdrop of the unexpected and pointed currency volatility affecting the local currency in much of 2015, this was perhaps not wholly unexpected. In the same vein, it was thus perhaps similarly not unexpected that there was more domestic travel and less international travel.

“However, a similarly significant short-term cause may have been the removal of significant capacity by certain locally based carriers, which was not fully replaced by other carriers given the brief amount of time that other carriers had to respond,” said MAHB.

Overall aircraft movements were up 2.9% to 814,472 in 2015, from 791,562 in 2014.

However, overall cargo movements in 2015 were 2.4% lower at 982,892 tonnes, but MAHB said the drop was in line with the industry’s trend.

On Istanbul Sabiha Gokcen International Airport (Istanbul SGIA) in Turkey, MAHB said the airport continued to register double-digit growth of 19.7% for 2015, over 2014 runway resurfacing works that restricted airport operation hours. Domestic and international sectors grew by 23.7% and 12.8% respectively. Overall aircraft movements registered a 19.3% growth in 2015.

On prospects, MAHB said Istanbul SGIA is expected to grow by over 20% in 2016, with 34.3 million passengers.

“In total, MAHB’s system of airports (including Istanbul SGIA) is expected to handle over 120 million passenger movements this year, a 7% growth from 2015’s 112.01 million passenger volume,” it added.