Kenanga Investment Bank Bhd (Kenanga IB) has projected a strong recovery in air travel for 2025, with tourist arrivals to Malaysia expected to reach 31 million, a 15% increase from an estimated 27 million in 2024.
In a report released today, the investment bank noted that tourist arrivals in 2019 had surpassed 26.1 million before the pandemic, fueled by rising demand for both business and leisure travel.
One of the key drivers of this growth is expected to be tourists from China, who historically account for around 12% of total tourist arrivals to Malaysia. Specifically, the introduction of visa-free travel for Chinese and Indian citizens has already shown promising results, with a sharp 82% increase in passenger numbers from December 2023 to September 2024 compared to the same period a year earlier.
Kenanga IB also highlighted that the agreement between China and Malaysia to extend visa exemptions for citizens of both countries until 2025 and 2026, respectively, is expected to contribute further to passenger growth.
“We expect this to drive growth in both airport passenger traffic and the demand for Capital A Bhd’s services in 2025,” the bank said.
For Malaysia Airports Holdings Bhd (MAHB), Kenanga IB has forecast a 6% increase in system-wide passenger throughput, reaching 146 million passengers in 2025. The growth is expected to be fueled by the resurgence in passenger numbers and the expansion of connectivity through new airlines and services at key airports, including Kuala Lumpur International Airport, Penang, Kota Kinabalu, and Langkawi.
Additionally, Kenanga IB noted that the reactivation of the rail link between Subang and Kuala Lumpur will improve airport access, making it easier for passengers to travel between the city and the airport.
For Capital A, the parent company of AirAsia, the bank expects the airline to launch 18 new routes, which will lead to double-digit capacity increases both domestically in Malaysia and Thailand, as well as on international routes in Indonesia.
