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Malaysia says aviation firms may need three years to recover from COVID-19

KUALA LUMPUR (Reuters) - Airlines in Malaysia could take three years to bounce back from the coronavirus pandemic, depending on the outbreak in the country and abroad, the transport ministry said.

A firefighter wearing personal protective equipment (PPE) sprays disinfectant on luggages of arrival passangers at the entrance of Kuala Lumpur International Airport, amid the coronavirus disease (COVID-19) outbreak in Sepang, Malaysia October 6, 2020. REUTERS/Lim Huey Teng/Files

Transport Minister Wee Ka Siong said earlier this week that in the Malaysian Aviation Commission’s (MAVCOM) revised projections for passenger traffic this year, it expects passenger numbers to shrink as much as 75.6% to 26.6 million, compared with the 109.2 million passengers recorded in 2019.

“In this regard, airlines are expected to need a period of three years to fully recover the situation from the impact of the COVID-19 epidemic, subject to the of the outbreak in the country and abroad,” Wee said in a written parliamentary reply dated Monday.

Airlines globally have taken a hit from the pandemic as governments shut borders and grounded flights to contain the spread of the virus.

MAVCOM first revised lower its 2020 passenger traffic forecast in June, expecting a contraction of as much as 50.3%, to 54.3 million passengers.

Wee said passenger demand had fallen from 280,321 a day in January to 59,378 a day in September, adding that the ministry continued to work with the Tourism Ministry and airlines to increase the public’s confidence to use aviation services to revive the domestic tourism sector.

For international tourism, he said the ministry “welcomes the government’s efforts to implement the concept of travel bubbles to some countries such as Singapore, Brunei, Thailand, Vietnam, New Zealand, Australia, South Korea and Japan”.

Malaysia’s national carrier Malaysia Airlines and the long-haul unit of AirAsia Group Bhd, AirAsia X Bhd, have both cut staff and announced restructuring plans.

AirAsia Group has also lowered its market recovery expectations.

The Malaysian arm of Indonesia’s Lion Air, Malindo Air has also launched a retrenchment exercise.

Reporting by Liz Lee; Editing by Kirsten Donovan

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