KUALA LUMPUR (Jan 10): Malaysia Airports Holdings Bhd (MAHB) missed its passenger volume target last year partly due to the shift of airlines seat capacity by some of the local carriers and the anticipated higher passenger movements related to the 14th general election (GE14) that did not take place.

The airport operator saw 2.5% more passengers passing through the 39 airports in the country it operates last year, to reach 99.03 million from 96.64 million in 2017. MAHB had expected passenger volume to grow 6.5% in 2018.

"The 2.5% growth for 2018 was lower than expected. While this lower growth follows a much higher 8.6% growth in 2017, the lower number is partly due to the shift of airlines seat capacity by some of the local carriers from domestic to international sectors, resulting in much lower growth for the domestic sector in the first half of 2018," MAHB said in a filing with Bursa Malaysia today.

"In addition, the anticipated higher passenger movements related to GE14 did not take place. Historically, higher passenger movements were recorded during election years.

"There was also a structural shift in passenger movements within the network of airports, with an increasing number of direct flights among regional international airports and domestic airports, bypassing the Kuala Lumpur International Airport (KLIA) in Sepang and the Subang airport," it added.

For 2019, MAHB has set a lower passenger growth target of 4.9%, with international and domestic passenger traffic growing at 2.4% and 7.6% respectively.

"The higher domestic passenger growth is a correction from the lower capacity provided in 2018. The recent announcement made to extend the 15-day visa exemptions for China and India tourists to December 2019 would help spur traffic.

"Tourism support activities are necessary to move the numbers in a maturing traffic. Aircraft movements is a derivative of passenger movements and will likely follow a similar trend," it said.

Last year, international passenger traffic at the 39 Malaysian airports climbed 4.5% year-on-year (y-o-y) to 51.66 million, while domestic traffic only rose by a marginal 0.4% y-o-y to 47.37 million passengers.

"Malaysia passenger movement traffic performance was mainly driven by the international sectors. Sixty city pairs registered double-digit growth over last year, including Tianjin, Jeju, Brisbane, Cam Ranh, Ningbo, Guiyang, Sihanouk, Nanjing, Honolulu, Jinjiang, Bhubaneswar, Zhengzhou and Amritsar," said MAHB.

It noted that the main contributors for international traffic in 2018 were from the AirAsia group, Malaysia Airlines and Malindo Air. "Twenty foreign airlines registered a double-digit growth in 2018 including Batik Air, Philippine Airlines, Lucky Air, Shanghai Airlines, Iraqi Airways, Jin Air, China Eastern, Oman Air, US Bangla Airlines and Xiamen Airlines," it added.

However, passenger traffic at KLIA Main Terminal fell 0.7% y-o-y to 28.1 million in 2018 from 28.29 million in 2017, while passenger traffic at klia2 was up 5.3% to 31.86 million from 30.27 million.

Meanwhile, the Sabiha Gökçen International Airport in Istanbul, Turkey (Istanbul SGIA) posted an 8.8% growth in passenger count to 34.06 million last year from 31.32 million in 2017.

MAHB is expecting passenger growth for Istanbul SGIA to moderate at 4.3% this year, partly due to capacity limitations pending the opening of the second runway.

Systemwide including its Istanbul operations in Turkey, MAHB saw a 4% increase in passenger traffic to 133.09 million last year from 127.95 million in 2017.

MAHB said the 133.09 million figure was the highest volume of passengers handled to date.

"Overall aircraft movements increased by 2.8%, with international and domestic aircraft movements recording an increase of 6% and 0.8% respectively over 2017," it added.

"2018 was a challenging year for the aviation industry in Malaysia against a few backdrops of uncertainty. The interim increase in fuel price, the US-China trade tensions, a few natural disasters and an aircraft crash incident in the region had to a certain degree affected the growth momentum," it said.

MAHB shares closed up four sen or 0.49% at RM8.20 today, with 996,200 shares done, giving it a market capitalisation of RM13.61 billion.