Travel resurgence: Passengers in the Kuala Lumpur International Airport. MAHB is not expected to see major fallout from troubles at a local budget airline. — Bernama
PETALING JAYA: The possible shutdown of the country’s second low-cost carrier MYAirline will not be overly damaging to Malaysia Airports Holdings Bhd
(MAHB), according to CGS-CIMB Research.
The research house said this is because MYAirline is primarily domestic in nature and had only 9% market share of domestic Malaysia seat capacity at its peak in August 2023.
The impact on the airport operator from a potential collapse of the airline would not be overly damaging, it said.
“Our estimates indicate that a bad-debt write-off of the low-cost carrier’s dues to MAHB could impact our financial year 2023 (FY23) forecast for group core net profit by around 3% (or about 6% of MAHB’s Malaysia-only core net profit).
“We expect MAHB to make the necessary write-off in its third quarter (3Q23) or 4Q23 forecast results announcement, if it has not already done so. We have not reflected any bad-debt write-offs into our financial forecasts for now,” the brokerage noted.
The research house said a local daily reported yesterday that MYAirline had not been paying its staff salaries and its suppliers on time, and CGS-CIMB Research viewed it as a sign of financial distress.
MYAirline was founded in 2021 and launched its first flight in December 2022, using an all-leased Airbus A320 narrowbody fleet.
It has nine 180-seater A320 aircraft, with 80% of its seat capacity deployed on domestic routes from KLIA2 to Kota Kinabalu, Kuching, Tawau, Sibu, Miri, Kota Baru, Langkawi and Penang. It has a 20% seat capacity on its Bangkok Suvarnabhumi and Bangkok Don Mueang route.
Since Aug 21, MYAirline has cut its domestic seat capacity by 25%, having dropped Sibu and Miri, and cutting back capacity to Kota Baru. By the middle of this month, the KLIA2 to Bangkok Suvarnabhumi flights are expected to be terminated, while Bangkok Don Mueang flights would be halved, the research house said.“However, CGS-CIMB Research remains positive on MAHB, with rerating catalysts including the upward trajectory of international traffic, while commercial rentals and revenues should also recover sharply as MAHB terminates rental discounts from Jan 1, 2024 and more airport shops reopen.”
