Kuala Lumpur International traffic surges another 16% in 1Q2014. Is the growth sustainable?

Malaysia continues to record some of the world's fastest passenger growth rates, driven by rapid capacity expansion by Malaysia Airlines (MAS) and AirAsia along with the launch of Malindo Air.

Malaysia Airports has recorded 18% passenger growth for 1Q2014, including 16% at Kuala Lumpur International Airport (KLIA). This follows growth of 18% for the full year in 2013, including 19% growth at KLIA, making it the fastest growing major airport in Asia.

The rate of growth is expected to slow down for the remainder of 2014 but remain in the double digits for the full year. The growth over the last year has been spectacular but has come at the expense of airline yields and hence profitability.