OSK Research has maintained its "overweight" call on the aviation sector. In a research note today, OSK Research said passenger growth for 2011 is likely to come in at 10-12 per cent at year-end.
"We see air travel growth for 2012 likely to moderate amid economic uncertainties over Europe's growing sovereign debt crisis and the anaemic economy of the United States," the research house said.
However, OSK Research believes Malaysia is insulated from a cyclical downturn in passenger travel, given its stronger gross domestic product (GDP)growth of 5.2 per cent on the rollout of more Economic Transformation Plan projects.
It said other factors include the surprise third quarter GDP numbers which were driven by strong private consumption growth.
"This, coupled with the fact that Malaysia has a high penetration of low cost carrier travel, reinforces our view that air travel will continue to remain resilient and benefit both AirAsia and Malaysia Airports.
"With AirAsia reaping more profit from lower jet fuel prices and the latter seeing an upside from a tariff hike, we also see both companies gaining from down-trading when cheaper fares stimulate spending on ancillaries and at airports," OSK Research said.
In contrast, the research house is sceptical of Malaysia Airlines as it feels that AirAsia stands to gain more from their tie-up in the immediate term.
Both airlines have entered into a comprehensive collaboration framework that will see both leverage on their respective core strengths. -- BERNAMA
"We see air travel growth for 2012 likely to moderate amid economic uncertainties over Europe's growing sovereign debt crisis and the anaemic economy of the United States," the research house said.
However, OSK Research believes Malaysia is insulated from a cyclical downturn in passenger travel, given its stronger gross domestic product (GDP)growth of 5.2 per cent on the rollout of more Economic Transformation Plan projects.
It said other factors include the surprise third quarter GDP numbers which were driven by strong private consumption growth.
"This, coupled with the fact that Malaysia has a high penetration of low cost carrier travel, reinforces our view that air travel will continue to remain resilient and benefit both AirAsia and Malaysia Airports.
"With AirAsia reaping more profit from lower jet fuel prices and the latter seeing an upside from a tariff hike, we also see both companies gaining from down-trading when cheaper fares stimulate spending on ancillaries and at airports," OSK Research said.
In contrast, the research house is sceptical of Malaysia Airlines as it feels that AirAsia stands to gain more from their tie-up in the immediate term.
Both airlines have entered into a comprehensive collaboration framework that will see both leverage on their respective core strengths. -- BERNAMA
