These agreements extend MAHB’s rights to manage, maintain, and develop the existing 39 airports in Malaysia until February 11, 2069. – Bernama photo
KUCHING (March 19): Malaysia Airports Holdings Berhad (MAHB) has announced that the signing of new operating agreements (OAs) and lease agreements (LAs) with the federal government on March 18, 2024.
These agreements extend MAHB’s rights to manage, maintain, and develop the existing 39 airports in Malaysia until February 11, 2069.
Under the agreement, MAHB can undertake the development capital expenditure (capex), subject to the mutual agreement of the parties on a capex recovery model which includes utilising the airport development fund (ADF); implementing project financing from the capital market; accessing funds provided by the government; or adopting any other bankable financing model.
The user fee percentage will undergo revision on a three-year basis. Currently, MAHB pays approximately 13 per cent of total revenue to the federal government, with an annual increase of 0.25 per cent.
“In accordance with the new OAs, 50 per cent of the passenger service charges (PSCs) component considered in the user fee calculation will be directed to the ADF,” commented analysts with MIDF Amanah Investment Bank Bhd (MIDF Research).
“The MARCS-PSCs mechanism has been substituted by an enhanced PSC compensation mechanism. However, detailed information regarding this replacement has not been disclosed yet.”
If the government undertakes a restructuring or reorganisation of the industry, MAHB and the government will collaboratively determine the revised agreed terms to be incorporated in the new OAs.
MIDF Research said the aviation services charges (ASCs) specified in Malaysian Aviation Commission’s (MAVCOM) latest decision paper will take effect starting in June 2024.
“Further details on the new OAs and LAs will be revealed during the briefing session on March 20, 2024.
“Therefore, we maintain our current earnings estimates, and our target price remains unchanged at RM8.75 per share.”
As for Kenanga Investment Bank Bhd (Kenanga Research), it expects business and leisure air travel to continue to recover throughout FY24.
“According to our in-house projection, tourist arrivals in Malaysia are expected to jump 35 per cent to 27 million in FY24 from an estimated 20 million a year ago.
“A key driver is Chinese tourists that had historically contributed to an estimated 12 per cent of total tourist arrivals in Malaysia.
“Furthermore, tourist arrivals is expected to be boosted by the 30-day visa-free regime for Chinese and Indian visitors to Malaysia starting from Dec 2023 and China, allowing Malaysian inbound visitors 15 visa-free days between December 1, 2023 and November 30, 2024.
This should underpin growth in MAHB’s passenger throughput demand in 2024. We expect traffic trajectory to grow in subsequent months as airlines continue to re-activate more aircrafts to match increasing demand.
Amplifying traffic growth trajectory is aircraft movements that are pointing towards increased medium and long-haul flights to Perth, Sydney and Auckland, Southeast Asia and South Asia destinations.
KL International Airport saw the return of Kuwait Airways after a seven-year hiatus, while two other foreign carriers i.e. KLM Royal Dutch Airlines and All Nippon Airways, will resume non-stop flight operations to Amsterdam and Tokyo, respectively, after temporarily ceasing operations due to the pandemic.
In addition, Malaysia Airlines has increased its flight frequency to Tokyo from November 2022, meeting the surge in travel demand after Japan reopened its borders to international travellers.
AirAsia Group meanwhile is focusing on its medium-haul operations and had increased its Malaysia AirAsia X flights to 44 times weekly across 10 routes from November 2022.