MY Morning Wrap | Malaysia's Aviation Sector Continues on Recovery Trajectory with 72 Airlines Operating at Local Airports

Malaysia's aviation sector remains on a trajectory of recovery, with 72 airlines operating actively within Malaysia Airports Holdings Bhd's (MAHB) network of local airports at the end of 2023, representing a 9.1% surge from the preceding year. This has resulted in a robust connection to a total of 147 destinations, comprising 113 international and 34 domestic destinations. In December 2023, the group recorded four million international passengers in Malaysia, the highest since February 2020. In 2023, the group achieved a milestone by surpassing 100 million total passenger movements for the first time since 2020, reaching an impressive 120 million passengers. Local airports played a pivotal role in achieving this milestone, contributing significantly to the total passenger movements.

Malaysia's economy is estimated to grow at 3.4% in the fourth quarter of 2023, representing a slight uptick from the previous quarter's growth of 3.3%, according to the Statistics Department. The services sector retained its position as the primary driver of economic performance during this period, with positive growth observed across all other sectors. Malaysia's Industrial Production Index registered an increase of 0.6% YoY in November 2023, backed by an expansion in the mining and electricity sectors, but the manufacturing sector experienced a downturn. Meanwhile, the inflation rate remained at 1.5% in December 2023, and Malaysia's total trade shrank 2.4% from RM237.6bn in November 2022 to RM231.8bn.

Johor's investment theme is gaining traction among investors as the state accelerates its plan to be a new economic powerhouse through high-impact business opportunities. Among the sectors under the radar are power utilities, construction, property, and logistics. The power utilities sector is a spillover beneficiary of Johor's data center development, and solar engineering, procurement, construction, and commissioning companies are potential immediate-term beneficiaries of the data center-driven demand for renewable energy EPCC services. The opportunities generated by the Rail Transit System link connecting Johor Baru to Singapore make the construction sector attractive, while the property sector would likely see an increase in demand and the logistics sector would benefit from increased trade activities in the state. Johor aims to grow its economy by 8.9% per annum in 2022-2030 to achieve the targets under Rancangan Struktur Negeri Johor 2030, which includes a real GDP of RM281.7bn and a GDP per capita of RM45,300 by 2030.