KUALA LUMPUR (Aug 15): Depite Malaysia’s air passenger traffic market being poised for a better full-year growth in 2017 at between 7.8% to 8.8%, surpassing that of 2016, the aviation industry is however expected to record flattish aggregate revenue growth, due to declining airfares.

The Malaysian Aviation Commission’s (MAVCOM) first Industry Report released today noted Malaysia’s air passenger traffic market recorded a 10.4% year-on-year growth for the first seven months of 2017 (7M17) and is poised for a 7.8% to 8.8% full-year growth, which is approximately equivalent to between 98.3 million and 99.2 million passengers.

“Although there are some positive prospects for the Malaysian aviation industry, the operating environment is expected to remain challenging”, said Gen Tan Sri Datuk Sri Abdullah Ahmad, executive chairman of MAVCOM, in a statement.

"We have seen signs and indicators that ASKs [average seat per kilometre] will increase, but we have also seen indicators that average fares will continue to tumble down; where it will mathematically fall is premature to tell, but we would expect total revenues of the industry [to] be flattish", MAVCOM’s chief operating officer Azmir Zain told reporters at the release of the Industry Report.

He said recording a spectacular growth this year would be unlikely.

MAVCOM expects average air fares to continue declining this year, resulting from competition among carriers, largely due to new capacities being added on to the industry, as well as the number of air traffic rights allocated over the past six months, suggesting new frequencies and destinations to be created.