Air fares expected to return to normal by November — transport minister

KUALA LUMPUR (July 21): The Malaysian Aviation Commission (Mavcom) expects airfares on domestic routes to return to 2019 levels by November this year as available seating capacity is projected to return to normal, subject to the development of the Covid-19 pandemic, said Transport Minister Datuk Seri Dr Wee Ka Siong.

Speaking in the Dewan Rakyat today, Wee (BN-Ayer Hitam) said that the government had conducted talks with regulators and stakeholders to find ways to maintain the affordability of air ticket fares, which more than doubled in recent months due to low load factor.

Wee was responding to questions about rising ticket prices for flights to Sabah and Sarawak, noting that prices of flight tickets from Kuala Lumpur to Sarawak jumped to over RM1,000 in June, but have since dropped to RM200-RM400.

“Based on recent analysis, Mavcom expects air fares to return [to normal] in November as capacity returns to normal, subject to the Covid-19 pandemic,” said Wee.

He added that the government had met with representatives from Malaysia Airlines Bhd (MAS), AirAsia Group Bhd and Malindo Airways Sdn Bhd last month to discuss about lowering their ticket prices.

“During the meeting, the airlines were requested to consider the reduction of fares in line with the government decision to provide an exception to the social distancing rules in airplanes.

“According to the airlines, even though the government has relaxed the social distancing rules, flight ticket prices may not drop immediately. They must ensure there is continuous and stable demand before airfares can return to normal as seen before the Covid-19 outbreak."

According to Wee, current load factor of AirAsia averages 60% compared with its break-even load factor of 80%-85%, while MAS’ load factor hovers at 50% versus its break-even load factor of 70%.

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