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Malaysian domestic aviation market: AirAsia gains at KLIA as Malindo Air, Malaysia Airlines contract

AirAsia has significantly increased its share of Malaysia’s domestic market over the past six months, benefitting from capacity reductions by both of its competitors at Kuala Lumpur International Airport (KLIA). AirAsia’s domestic traffic at KLIA has increased by 18%, while domestic traffic at Malindo and Malaysia Airlines combined has decreased by 28%.

AirAsia’s share of the domestic traffic at KLIA is now 66%, compared to 55% a year ago. KLIA accounts for 65% of total domestic traffic in Malaysia, which increased by 4% in 2017, to 25 million. 

Malaysia’s domestic market is generally price sensitive, making it easier for an LCC to prevail in any capacity battle. Malaysia’s two full service airlines, Malindo and Malaysia Airlines, are better off picking a fight in the international market.

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