PETALING JAYA: The Wuhan coronavirus outbreak is believed to negatively affect the aviation sector as it will curb travel appetite within the Asean region, especially AirAsia X (AAX) that has bigger exposure to international capacity via its long-haul operations.
“In terms of foreign tourist arrival in Malaysia, Chinese travellers are the third largest, while Chinese and Indian tourists make up about 23% of air passengers in 2019,” said PublicInvest Research in a note today.
Malaysia has suspended all visa facilities for Chinese tourists from Wuhan city and Hubei province as well as neighbouring provinces in China as part of its measures to contain the spread of the coronavirus outbreak.
AirAsia has also suspended its route to Wuhan until end of February.
PublicInvest Research expects traffic growth to ease around 4-6% in 2020 due to global economic growth weakness. Profitability for airline players is also expected to remain challenging due to competition affecting yield, overcapacity and volatility in foreign exchange.
“We maintain our neutral call on the sector.”
Meanwhile, the research house noted that AirAsia Group Bhd’s Q4 operating statistics were within its forecast, but AAX’s numbers were slightly below its expectations.
“Passenger traffic growth continued to be strong at 9% and 8% respectively for 4Q19 due to high demand from year end peak travel season. Passenger load factor was commendable at 82% and 81% respectively.”
On the whole, Malaysia’s passenger traffic grew 6.1% to 105 million in 2019.
source https://www.thesundaily.my/business/coronavirus-outbreak-negative-for-aviation-sector-publicinvest-research-JL1951784
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