SEPANG- Malaysia Airports’ fully owned Turkish asset, the Istanbul Sabiha Gökçen International Airport (ISG), has shown encouraging recovery in 1H21 with total passenger traffic movements at 53% of pre-COVID-19 levels and an average load factor of 70% for its flights. Airports Council International (ACI) had also ranked the airport as the 4th busiest in Europe within the same period. Recovery remains optimistic for the second half of the year in tandem with the International Air Transport Association’s (IATA) outlook of strong traffic return by the 4Q21 in countries with high vaccine rollouts such as Turkey with 51% of its total population currently vaccinated. As recently as August 2021, the European Organisation for the Safety of Air Navigation (Eurocontrol) had also ranked Turkey as the 6th busiest country in Europe for air traffic. Additionally, Turkey has recently been added to European Union (EU) COVID-19 Passport scheme meant to facilitate the reopening of economic and social activities including travel.
Group Chief Executive Officer (Group CEO) of Malaysia Airports, Dato’ Mohd Shukrie Mohd Salleh said that ISG is a significant contributor to the Group’s recovery, “Traffic recovery in ISG is more robust compared to our Malaysia operations. For ISG, passenger movements rose by 17.6% in 1H21 over 1H20, whereas it had contracted by 84.6% for our Malaysia operations over the same period. Nevertheless, both countries are achieving commendable vaccination rates. More than 50% of the adult population in Malaysia has received completed doses and we can expect to achieve public immunity by October 2021. With this, we can expect traffic conditions to improve as interstate border restrictions may be further relaxed by year end.”
“Recent announcements made by the Malaysian government to allow some flexibility for fully vaccinated people to travel between states and engage in tourism activities within the same state, for example the Langkawi travel bubble emulating the Phuket Sandbox Model, is an early indication for cautious traffic resumption. We can expect domestic traffic to gain traction once 70%-80% of population have been fully vaccinated, in tandem with economic activities, the re-opening of local tourist spots and Visiting Friends and Relatives (VFR) tourism. Meanwhile, we are doing our part to restore travel confidence by ensuring a safe travelling experience for all our guests. Five of our airports have received the Airport Health Accreditation (AHA) from ACI and more will follow suit. The first was ISG, followed by KL International Airport, Kuching International Airport, Langkawi International Airport and Kota Kinabalu International Airport” he added further.
Malaysia Airports recently announced their financial results for the first half ended 30 June 2021 (1H21), with the Group reporting revenue for 1H21 of RM660.3 million. Malaysia operations registered revenue of RM331.9 million, a contraction of 64% compared to the same period last year. Nonetheless, the impact was cushioned by revenue from its Turkey operations which rose 14.6% to RM328.5 million.
The Group registered corresponding EBITDA for 1H21of -RM22.5 million, 108.2% lower than 1H20, with Malaysia operations at -RM261.2 million and Turkey operations at RM238.7 million. However, the Group’s decline in earnings continue to be mitigated by cost containment initiatives, contributing to a reduction in total costs by 27.7% or RM297.0 million.
The Group’s liquidity remains strong with cash and money market investment position of RM1.5 billion and RM3.125 billion in undrawn contingency facilities. The Group also continues to enjoy strong AAA credit ratings by RAM and A3 by Moody’s.