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PETALING JAYA: The aviation sector in Malaysia is poised for recovery in 2024, as air travel demand is set to return to pre-pandemic levels, says TA Research.
The research house said in a report that tours to China are in high demand.
It said this is due to increased flight frequencies connecting Malaysia and China, as well as relaxations on entry requirements to China.
Hokkaido, Japan, as a travel destination is also highly sought after as Apple Vacations Sdn Bhd said it will charter five direct flights in December 2023 to cater to overwhelming demand.
“Overall, we opine that the price increase is relatively mild considering the year-end peak travelling season. This is underpinned by increases in flight capacities and a decline in fuel cost,” it said.
TA Research added that in anticipation of the Matta Fair next month, it expects the momentum to be steady despite the weak ringgit performance.
“Separately, we believe air ticket prices would normalise further in 2024, with airlines putting more capacities to the market,” it said.
The research house added that recent checks on airline websites revealed significant declines in airfares next year, particularly to destinations like Hong Kong, Bangkok and Osaka.
“This is healthy for the market, in our opinion, as the ongoing market normalisation with rising capacities and declining airfares would put the aviation sector on a stronger footing of demand-supply equilibrium.”
TA Research is maintaining a “hold” recommendation on Malaysia Airports Holdings Bhd
(MAHB) with an unchanged target price of RM7.40.
Citing the Malaysian Aviation Commission, the research house said there will be no hike in passenger service charges to boost travel demand and a migration to cost-based approach is likely to be seen in the future.
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