MAHB’s visionary approach to meeting evolving air travel trends

By continuously upgrading facilities and expanding capacity, it aims to remain competitive in the dynamic aviation industry 

by AKMAR ANNUAR & ZAHIN ZAILANI 

MALAYSIA Airports Holdings Bhd (MAHB) has been actively investing in new infrastructure projects to enhance its airport facilities and accommodate the growing demand for air travel. 

These investments are expected to contribute to the company’s earnings growth this year, following its strong performance in 2023. 

For the financial year ended Dec 31, 2023, MAHB reported a net profit of RM543.2 million (2022: RM187.2 million), notably higher than the pre-pandemic net profit of RM537 million recorded in 2019 despite passenger traffic not having fully recovered to pre-pandemic levels. 

On March 18, MAHB and the government entered a new operating and land lease agreement to extend the airport operator’s concession to manage 39 airports in the country, by 35 years to 2069. 

Therefore, by continuously upgrading its facilities and expanding its capacity, MAHB aims to remain competitive in the dynamic aviation industry. 

Additionally, the company is exploring innovative solutions to improve efficiency and reduce operational costs. 

MAHB’s spokesperson told The Malaysian Reserve (TMR) that the company is adamant to hold a leading position in South-East Asia’s (SE Asia) airport industry, benefitting from its strategic location and extensive network of airports. 

To adapt to changing demands of air travel trends and passenger traffic, MAHB has been focusing on enhancing passenger experience through digitalisation, automation and customer-centric services. 

With its ongoing investments and focus on innovation, MAHB is well-positioned to capitalise on the region’s growing aviation market and maintain its leadership in the industry. 

Baggage handling systems at KLIA are being improved as part of infrastructure upgrade

Elevating Passenger Experience

“We are dedicated to reclaiming our position among the world’s top airport operators by focusing on operational efficiency and customer satisfaction through various infrastructure projects and investments,” the spokesperson said. 

Key initiatives include the implementation of digitalisation measures at Kuala Lumpur International Airport (KLIA), such as a biometric facial recognition system and self-service check-in and bag drop facilities, it disclosed. 

Additionally, MAHB is upgrading IT networks and implementing the common-use passenger processing system (CUPPS) at international airports across Malaysia to streamline check-in processes. 

Major infrastructure upgrades, including the replacement of Aerotrains and baggage handling systems at KLIA, are underway, alongside similar programmes at multiple domestic airports. 

Notably, MAHB is refurbishing restrooms at international airports like Kota Kinabalu and Kuching to enhance passenger comfort. 

Additionally, terminal optimisation efforts are being carried out at other domestic airports to improve departure processes through self-check-in kiosks, streamlined immigration procedures and upgraded baggage reclaim systems. 

Fiscal Health and Growth Prospects

In terms of fiscal health and growth prospects, MAHB’s pro-active approach to infrastructure development positions it well for future growth. 

“MAHB’s strong financial position, supported by sustainable cash reserves and robust funding sources, enables effective strategy execution in the dynamic aviation landscape,” TMR was told. 

The company’s strategic business plan prioritises sustainable long-term growth and value appreciation, with a focus on improving operational efficiency, customer service and digital innovation. 

Sustainability is central to MAHB’s operations, as it actively integrates sustainable practices to meet stakeholder expectations. 

Overall, according to the spokesperson, MAHB’s fiscal health, strategic initiatives and commitment to excellence position it for continued success in the competitive airport industry. 

Biometric facial recognition is among the digitalisation measures implemented by MAHB

Changing Air Travel Trends

MAHB has demonstrated resilience and innovation in adapting to evolving air travel trends and fluctuating passenger traffic. 

“Significant recovery was observed in 2023, with promising signs of reaching pre-pandemic traffic levels by the end of 2024,” its spokesperson observed. 

Moreover, the company focuses on enhancing international passenger movements through strategic policies and collaborations with carriers, anticipating near pre-Covid levels of traffic in the Asia Pacific region in 2024. 

Meanwhile, in terms of safety amid global threats, MAHB has implemented rigorous security measures and protocols to ensure the safety of passengers and staff. 

This includes investing in advanced security technologies, enhancing security training programmes and collaborating with relevant authorities to mitigate risks. 

The spokesperson said MAHB ensure compliance with local and international safety standards and policies, with a focus on reshaping the end-to-end passenger journey for seamlessness and security. 

Even so, continuous deployment and enhancement of cyber security defences are prioritised to safeguard against global threats, including pandemics and security concerns. 

Position in SEA’s Airport Industry

MAHB aims to enhance Malaysia’s connectivity to the Western region through collaborations with Middle East carriers, leveraging their network expansion and capacity increase. 

The company focuses on refining its strategic positioning in the competitive SE Asian airport industry landscape, with targeted advancements at key airports such as Penang International Airport (PIA) and Kota Kinabalu International Airport (KKIA). 

According to MAHB’s spokesperson, development projects at PIA have received Cabinet approval, and comprehensive plans for KKIA have been presented to Sabah. 

“We adopt a balanced approach to development across our airport network, supporting Malaysia’s broader vision of enhancing airport infrastructure for regional economic growth and connectivity, while ensuring equitable air accessibility for socioeconomic wellbeing,” he said. 

Major infrastructure upgrades, including the replacement of Aerotrains, are underway

Analysts’ Positive Outlook

Analysts are anticipating favourable earnings growth for MAHB in 2024, driven by a continuous recovery and growth in passenger traffic. 

The company’s strategic plans focus on capitalising on passenger volume, diversifying revenue streams, enhancing efficiency and exploring growth opportunities. 

“With a solid performance in 2023 and proactive planning, MAHB remains committed to sustaining financial growth and stakeholder value amid market dynamics,” the spokesperson said. 

UOB Kay Hian Holdings Ltd (UOB Research) maintains its positive outlook on MAHB, affirming a ‘Buy’ rating with an upgraded target price (TP) of RM8.32, up from RM8.16. 

The optimism stems from expectations of a rebound in travel activity throughout the year. 

In a recent report, the research firm highlighted MAHB as poised to benefit significantly from the anticipated recovery in the aviation sector. 

Forecasts suggest a robust resurgence in earnings for MAHB in the coming quarters, largely supported by an increase in passenger throughput. 

“MAHB’s near-term earnings outlook remains resilient as it capitalises on the recovery of passenger traffic and enhanced commercial and retail operations. 

“The finalisation of the revision of 2024 airport charges and the new operating agreement are anticipated to serve as key catalysts for re-rating,” the report read. 

Although passenger traffic to Malaysia saw a notable 28% improvement to 6.6 million in November 2023, attributed to increased airline seat capacity, UOB Research noted a third consecutive month-on-month (MoM) decline since its peak at 7.4 million passengers in August. 

This decline is partly attributed to seasonally lower travel demand and an unexpected decrease in domestic capacity since mid-October 2023. 

Nevertheless, November’s cumulative traffic aligned with expectations, reaching 86.6% of the full-year 2023 projection. 

Significantly, the international sector spearheaded the traffic rebound, achieving a remarkable 82% compared to pre-Covid levels. 

“We maintain our projections, implying recovery rates of 76% for international passengers and 87% for domestic passengers. 

“Drawing from the accelerated traffic recovery in 2023, we revise upwards our full-year 2024 and 2025 traffic assumptions by 3% and 2%, respectively,” the report added. 

Additionally, the operations at MAHB’s Sabiha Gökçen International Airport (SGIA) in Istanbul, Turkiye, witnessed resilience, with a 12.4% year-on-year (YoY) increase in throughput to three million passengers in November. 

Cumulative traffic for the month surged by 21% YoY to 34.4 million passengers, surpassing 2019 levels by 4%, primarily driven by a surge in international passengers. 

UOB Research highlighted SGIA’s anchor airline, Pegasus Airlines, which plans to expand its current fleet from 105 to 150 aircraft by 2029, setting the stage for sustained traffic growth at the airport. 


  • This article first appeared in The Malaysian Reserve weekly print edition