KUALA LUMPUR (Jan 19): CGS-CIMB Securities Sdn Bhd said on Wednesday (Jan 19) Malaysia Airports Holdings Bhd (MAHB) is the "unequivocal winner” as new airline MYAirline Sdn Bhd is seen triggering price competition in the country’s aviation sector.

In a note on Wednesday, CGS-CIMB analyst Raymond Yap said MYAirline is currently in the process of starting up. 

“It has recruited many individuals and negotiated the lease of two [Airbus] A320s with more to come. 

"An airline starting up during the [Covid-19] pandemic with a clean balance sheet and access to ultra low-cost aircraft leases will likely ensure low operating cost and the ability to compete aggressively with incumbents for market share by offering sustainably low airfares,” Yap added.

Existing airlines in Malaysia include Malaysia Airlines Bhd, AirAsia Group Bhd and Malindo Airways Sdn Bhd.

Yap noted that AirAsia’s aircraft fleet grew last year despite the Covid-19 pandemic after the group absorbed its affiliates’ planes.

According to him, AirAsia will likely be eager to redeploy its aircraft fleet and retain its market share in Malaysia’s aviation sector.

"[Meanwhile,] Malaysia Airlines has renegotiated its aircraft lease rates and is in a good position to compete, while Malindo is also considering bringing back its jet planes from Indonesia if demand in Malaysia warrants their return.

"In short, we think that aggressive price competition will likely follow a surge in aircraft seat capacity in the post-pandemic period, which may stimulate passenger traffic volumes, with MAHB as the unequivocal winner,” the analyst explained.

Yap said CGS-CIMB, however, reduced its target price for MAHB to RM6.95 from RM7.45 on a downward revision of its 2022 forecast for aviation passenger traffic on account of Omicron Covid-19 variant-driven disruptions.

Nonetheless, he noted that the research house had an unchanged "add" call for MAHB shares.

At 10.37am, MAHB had slipped eight sen or 1.38% to RM5.72, valuing the company at about RM9.5 billion.

It has 1.66 billion issued shares, according to the group’s latest quarterly financial report.