The reopening of borders has led to a sharp recovery in air passenger traffic.
UOB Kay Hian Research believes that with further resumption of flights and gradual improvement in passenger traffic, pressure on both Capital A and MAHB’s operating profitability should ease in the second quarter of 2022 with narrowing losses.
As for Capital A, it estimates that the passengers carried and load factors will recover to about 80% of pre-Covid-19 levels in 2023.The domestic and international traffic volume recovery is based on international travellers’ mobility behaviour amid the removal of pandemic-related constraints. It expects more favourable terms for the OA and this includes adjustment of airports’ passenger service charge .
It said jet fuel prices, which usually command about 20% to 30% of airlines’ operating costs, have been surging as much as 100% year-to-date.