Malaysia Airports Holdings Berhad (the Group) has reported a -58.6% contraction in revenue to RM1,602.7 million/$393 million for the nine-month period ended 30 September 2020.

Retail revenue dropped to RM140,820 million/$35 million in the first nine months of 2020 from RM632,487 in the previous corresponding period last year. Non-aeronautical revenue decreased by 57.3% to RM690.8 million compared to the previous corresponding period in 2019.

Overall group revenue of RM1,602.7 million during the nine-month period, was 58.6% lower than the revenue of RM3,868.7 recorded in the corresponding period in the previous year. The decrease was in tandem with the contraction in passenger movements of 65.5% due to the outbreak of the coronavirus (Covid-19). The outbreak of the pandemic led to large capacity cuts, travel bans and border closures worldwide.

Effective cost containment efforts executed by the Group led to a sharp contraction in total costs by 31.5% (RM708.9 million). Malaysia Airports said that the prolonged impact from the Covid-19 pandemic, which had resulted in a -65.5% drop in total passenger traffic to date, effectively widened the Group’s Loss After Tax for the same period to RM431.2 million.

Despite the overall reduction in Group passenger traffic, Istanbul Sabiha Gökçen International Airport (ISG) carried 34.7% of the Group’s 36.2 million passengers in the first nine months of 2020. This compares to only 25.7% of the Group’s passenger volumes in the first nine months of 2019.

FASTER RECOVERY IN ISTANBUL

The increase is attributed to the earlier opening of international borders at ISG in June, paving the way for a faster recovery.

Domestic traffic in Malaysia has gradually improved. Passenger traffic was 4.2-times higher as of September, following the lifting of the inter-state travel ban in June 2020. This was in line with the global trend of faster domestic recovery compared to international travel.

Passenger traffic across the Group’s Malaysia operations reduced by 69.6% to 23.7 million passengers in the first nine months of 2020.

Kuala Lumpur International Airport recorded a -72.9% drop in passenger traffic to 12.5 million passengers for the same period, while other Malaysian Airports recorded an aggregate decline of -64.9% to 11.2 million passengers.

Traffic for the nine-month period at ISG dropped just 53.5%, with 12.6 million passenger movements in that period.

Malaysia Airports said: “ISG shows continuing signs of recovery momentum with strong demand for both domestic & international air travel. This is reflected in the robust passenger load factors recording above 70% since August.”

Reflecting on a turbulent period as a result of Covid-19 and looking to the future, the company commented: “The global economy and travel market have been severely impacted by the Covid-19 pandemic, with cross-border restrictions introduced by most countries in efforts to curb the spread of the virus.

“Virtually all airports around the world have recorded significant contraction in traffic for the year-to-date.

“Apart from the initial recovery in domestic air travel, other catalytic factors which will spur traffic recovery include the gradual reopening of international borders, especially for countries within Asia Pacific.”

With some countries already beginning discussions to ‘synchronise the screening and quarantine processes,” Malaysia Airports remarked: “This approach is expected to have spill over effects to domestic air travel whilst improving international sector movements.”

On the positive revival in passenger movements at ISG in September 2020, the company concluded: “The removal of border closures added with the strategic location of Turkey, has given ISG the edge to regain connectivity with other neighbouring regions.”