Malaysia are operating beyond terminal design capacities average of RM5.1 billion.

Malaysia: The domestic passenger traffic market, which ranks the third largest in Asean, grew 10.4 per cent year-on-year for the first seven months of 2017, with a total of 56.9 million passengers.

However, capital expenditure needs to be increased significantly as seven airports in Malaysia are operating beyond terminal design capacities.

This was cited in the Malaysian Aviation Commission (MAVCOM) 2017 outlook report for the industry, which was launched today.

"On the back of this growth MAVCOM expects total passenger traffic for the year to grow by 7.8 per cent to 8.8 per cent, translating into 98.3 million to 99.2 million passengers,” the report, which is prepared bi-annually, stated.

Malaysia's airports made the country the third most connected in Asean as they offer passengers direct and indirect flights to 116 international destinations.

"This is the third highest in Asean after Singapore (153) and Thailand (151),” the report said.

It also cited that the industry contributed an average of RM5.1 billion annually to the Malaysian economy.

"In 2014 the industry employed nearly 44,000 full time workers across various services.

"Based on the latest available data from the Statistics Department in 2010, the industry generated twice the (returns) for the economy for every RM1 (it generated),” stated the report, adding that this was the 28th highest multiplier of the 122 industries in Malaysia.

The total fleet size of Malaysian airlines increased from 213 to 278 aircraft in the six years leading to 2016, it stated.

"The capacity increase coincided with a period of decreasing average fares, whereby those for domestic and international routes decreased by 5.9 per cent and 8.0 per cent per annum respectively.

"This contributed towards Malaysian carriers overall reporting negative spreads between revenue per available seat kilometre (RASK) and cost per available seat from 2010 to 2016.”

Based on the latest audited reports available, the 20 non-scheduled service providers collectively reported RM1.6 billion in revenue and RM156.8 million in operating profits in 2015.

"Only firms operating in the on-demand charter and oil and gas markets reported positive operating profit margins indicating stiff competition in the non-scheduled services sub-sector.”

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