KUALA LUMPUR -- Malaysia's two passenger airlines -- Malaysia Airlines (MAS) and AirAsia -- face a near future of intense competition for the remaining consumers who are confident enough to spend on travel.
"It really is a traveller's market when the choices presented are premium low cost of five-star service at a value," said MIDF in its research note.
The recently concluded fourth quarter result came below the research firm's expectations as the sector felt the effects of a worse than anticipated economic slowdown and bad bets on fuel prices, it said Thursday.
"Nonetheless, the expectation is a reprieve in 2009, especially on the cost structure fuel hedging that would ease some pressure on operating margins," it added.
MIDF said if a recovery takes place in the first half of 2010, both arlines should benefit from an unexpected surge in passengers from the Asian region.
"The low fuel prices favour AirAsia as they can price their tickets very aggressively and we expect them to start hedging again if fuel prices range moves upward to the US$60-US$70 per barrel," it said.
In addition to passengers, MAS's cargo operations are expected to do well, the research firm said.
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