PETALING JAYA: A full reopening of borders in April and further easing of entry requirements were the best measures to get the aviation industry back on its feet.
In a report to customers, TA Research said it does not expect a host of direct positive measures for the aviation industry in the upcoming 2023 budget.
For the first eight months of this year, it noted airport operator Malaysia Airports Holdings BhdThe total number of passenger movements of (MAHB) in Malaysia increased by 747.1% year-on-year, compared to 675.8% a month ago, to 29.8 million, representing 76.5% of its forecast for the full year.
“The decent performance is due to the easing of travel restrictions in Malaysia and countries in the region,” the research house said. He noted that visa relaxations in Saudi Arabia from July 30 had also led to more trips to Umrah in August.
“Meanwhile, the ease of entry procedures for foreign travelers, such as the elimination of the need for travel cards, pre-departure and arrival testing as well as home monitoring order requirements from from August 1 for fully vaccinated travelers also contributed to the growth.”
TA Research also said it continues to believe domestic volume will be between two million and three million passengers per month for the remainder of 2022 amid increased seat allocation for the international segment.
“For the international segment, the seventh uninterrupted monthly growth since February suggests that demand for air travel to and from overseas remains encouraging, thanks to the full reopening of international borders for countries in this region.
“Compared to pre-pandemic levels, there is still a long way to go to full recovery, given that passenger movements in August were only 35% compared to August 2019.
“Looking forward, we believe growth will be driven by further easing of travel restrictions in Japan, Hong Kong, Taiwan as well as China,” TA Research said.
It maintains its “buy” call on MAHB stock with a valuation of RM7.36 per share.
At last look, the stock was trading at RM5.89 each, valuing the whole group at around RM9.8 billion.