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Airlines in Malaysia may need three years to recover, transport minister says

KUALA LUMPUR (REUTERS) – Airlines in Malaysia could take three years to bounce back from the coronavirus pandemic, depending on the outbreak in the country and abroad, the transport ministry said.

Transport Minister Wee Ka Siong said earlier this week that in the Malaysian Aviation Commission’s (Mavcom) revised projections for passenger traffic this year, it expects passenger numbers to shrink as much as 75.6 per cent to 26.6 million, compared with the 109.2 million passengers recorded in 2019.

“In this regard, airlines are expected to need a period of three years to fully recover the situation from the impact of the Covid-19 epidemic, subject to the of the outbreak in the country and abroad,” Datuk Seri Wee said in a written parliamentary reply dated Monday (Nov 9).

Airlines globally have taken a hit from the pandemic as governments shut borders and grounded flights to contain the spread of the virus.

Mavcom first revised lower its 2020 passenger traffic forecast in June, expecting a contraction of as much as 50.3 per cent, to 54.3 million passengers.

Mr Wee said passenger demand had fallen from 280,321 a day in January to 59,378 a day in September, adding that the ministry continued to work with the Tourism Ministry and airlines to increase the public’s confidence to use aviation services to revive the domestic tourism sector.

For international tourism, he said the ministry “welcomes the government’s efforts to implement the concept of travel bubbles to some countries such as Singapore, Brunei, Thailand, Vietnam, New Zealand, Australia, South Korea and Japan”.

Malaysia’s national carrier Malaysia Airlines and the long-haul unit of AirAsia Group, AirAsia X, have both cut staff and announced restructuring plans. AirAsia Group has also lowered its market recovery expectations.

The Malaysian arm of Indonesia’s Lion Air, Malindo Air has also launched a retrenchment exercise.

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