Aviation Outlook Improves, with MAHB as Clear Beneficiary | Daily Express Online


Aviation outlook is improving, with MAHB as clear beneficiary

Posted on: Saturday September 18, 2021

By: Bernama

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A man wearing a face mask is pictured at KLIA in Sepang. (Photo: Shafwan Zaidon)

Kuala Lumpur: Prospects for the aviation industry are improving after Langkawi reopens to vaccinated travelers, with Malaysia Airports Holdings Bhd (MAHB) to be the direct beneficiary of the domestic travel bubble, CGS-CIMB Securities said. travel to Langkawi is positive for MAHB due to increased passenger traffic and low air fares associated with ongoing hotel promotions in Langkawi. “Airlines like AirAsia Group Bhd will also benefit, although in the initial phase they may face strong competition, low fares, unequal charges on outbound and return flights and presence passengers using their previously canceled flight credits, ”the brokerage said in a note Friday.

CGS-CIMB said that despite the introduction of a testing regime as part of the Langkawi travel bubble, there was still a risk of travelers infected with Covid-19 entering the island, potentially causing epidemics and clusters, and some newly infected travelers could bring the virus back to their countries of origin. According to the brokerage, these risks could be higher for the Langkawi travel bubble than for the Phuket Sandbox program due to the lower level of stringency of Covid-19 testing for Langkawi. “As a result, the Langkawi travel bubble could be interrupted in the future if outbreaks of infection occur.


“Of course, the reopening of domestic travel will not necessarily progress in a straight line; we expect starts and stops along the way, ”he said. In the Phuket Sandbox program, international and domestic travelers must be vaccinated against Covid-19 and must also pass RT-PCR tests, which have an accuracy of almost 100%. In Langkawi’s case, less accurate saliva self-test kits are admissible, with an accuracy of up to 94%, according to pharmaceutical sources.


CGS-CIMB reiterated its call for overweighting in the aviation sector, with MAHB as first choice. He gave an “add” recommendation for the airport operator with a target price (TP) of RM 6.96 and a “reduce” call for the AirAsia group with a TP of 23 sen. In its view, the AirAsia Group is at risk of being classified as a Practice Note 17 company by January 8, 2022, if the low cost carrier does not remedy its negative equity situation, or if Bursa Malaysia does not extend the exemption period.

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