Is Malaysia a Good Place for Aviation Businesses?

As we know (and as I have mentioned in my previous articles), the ASEAN region is truly a cornucopia of opportunity and great potential. Globalisation, increasing levels of education and training, and technological improvements have made this region a thriving ecosystem where aviation businesses can flourish.

 So, over the next few weeks, join me as we dissect the aviation market in various ASEAN countries where opportunities are on the rise. Today, let’s begin with Malaysia, my beloved home country, and the home country of Dviation.

Why Malaysia?

 Personally, if you were to ask why we chose to headquarter Dviation in Malaysia, I’d say the answer is plain and simple: besides being a native here, this tropical paradise is rich in culture, the people here are friendly and great to work with. And most importantly, the food is to die for (yes, we Malaysians are all about the food)!

 In all seriousness, Malaysia is not one to be missed – and not just because of the food! For starters, the Malaysia – Singapore route was named the busiest international flight route in the world for the second year in a row. If this trend keeps up, we are looking at a growing aviation market to cater specifically to this region’s airspace. Averaging 82 flights a day, with a total of over 30,000 flights in a year, it’s no doubt that this is air route presents many opportunities for aviation and non-aviation businesses alike, facilitating travel, trade, and the likes.

 Similarly, on other routes, Malaysia has benefited from inbound traffic. According to CAPA Centre for Aviation, between 2017 and 2018, the total number of visitors to Malaysia increased by 13% (excluding Singapore visitors, who may enter via land crossings). The country also saw growth in sixth-freedom traffic (freedom to carry traffic between two foreign countries via the carrier’s home country), thanks to an extent of liberalisation.

 With rising air travel, Approved Maintenance Organisations, Approved Training Organisations, and other ancillary firms are bound to grow along with this increase.

 Issues and Limitations in Malaysia

 On one side, it may look like Malaysia’s aviation landscape is broadening, yet on the flip side, there may be some limitations restraining this growth. Increasing competitive pressures from foreign airlines in the growing international market can eventually lead to a slowdown in growth. Despite achieving growth in passenger traffic, if we take a look at the actual figures, we find a slightly different story.

As reported by CAPA, growth last year was only 3%, compared to 10% in 2017. Thus, while there was growth, the figures show that a slowdown could be imminent. To add to that, out of the 6 airlines based in Malaysia, only 1 was profitable in 2018.

 How Can We Address These Issues?

 To empower the Malaysian aviation industry players, we firstly need to focus on manpower development. Boosting the capabilities of the local aviation skill pool, we can in turn increase the capabilities and capacity of the market as a whole, subsequently leading to an increased competitive edge.

 With this in mind, Dviation strives to provide training that is not only high-quality, but also cost-efficient. Besides providing training to aviation professionals to enhance their existing skills and add to their skill list, we also offer training to our new generation of aviation personnel to cater to the increasing competitiveness of the global aviation industry.

 Furthermore, by creating job opportunities, aviation businesses in Malaysia are able support and boost the competitiveness of our local airlines. How? Well, for Dviation, our aircraft maintenance branch has set up line maintenance stations to increase maintenance capacity. This is to cater to the growth of tourism and passenger traffic into the country. We also have a CAMO branch that provides support to new airlines and to encourage start-ups. We believe this may increase the capacity and competitiveness of the Malaysian aviation market.

 Another way the market, as a whole, can tackle the issues associated with growth limitations is through regulatory harmonization throughout the region. Harmonization will present countries with a level playing field, providing opportunities of collaboration and growth for aviation businesses. This can likely be achieved with the ASEAN Single Aviation Market, which has yet to fully materialize. So, what we can do as industry players is to support the call for regulatory harmonization.