FLIGHT WOES DUE TO REGIONAL CONFLICTS DEMAND MALAYSIA’S PIVOT TOWARD DIGITAL, TRADE DIVERSIFICATION -- EXPERT

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, May 9 (Bernama) -- Malaysia’s aviation industry will likely record lower revenues as it faces higher air travel costs, supply chain delays and reduced tourism activity owing to prolonged flight disruptions.

This was triggered by the closure of Pakistan’s airspace after tensions flared between Delhi and Islamabad, while the ongoing Ukraine-Russia conflict weighed on business sentiment.

With global aviation routes disrupted, rerouting flights will add to high logistic costs, while tourists will be reluctant to travel due to safety concerns.

Against such predicaments, the view is that Malaysia needs to focus on bolstering revenue by expanding trade and making its industries more resilient to tide it over what potentially could be difficult times ahead, made worse by American tariffs.

Putra Business School Associate Professor Dr Ahmed Razman Abdul Latiff concurred, saying the rerouting of flights over longer and less direct paths will raise operational costs for airlines and impact the flow of goods and people into and out of Malaysia.

“These prolonged flight reroutings will likely cause higher logistic costs and potential disruptions to the supply chain. 

“In addition, tourist movement will be affected, which can cause a negative impact on the aviation industry,” he told Bernama today.

He added that safety concerns could also influence travel behaviour, leading to softer demand in the outbound travel segment.

“Malaysians may consider postponing their travel arrangements, especially long-haul flights, due to fears of incidents similar to MH17,” he said.

Trade expansion and industry resilience 

With limited control over global airspace due to restrictions, Ahmed Razman said Malaysia’s best defence lies in expanding its international trade footprint and rethinking its economic priorities.

“Having more unilateral trade agreements is becoming more realistic and effective as it offers alternative trading partners and potential for trade expansion, which is considered necessary amid the rising global tension,” he noted.

Beyond trade, he urged policymakers to prioritise the services and digital economy sectors less exposed to physical movement and global flight disruptions.

“Malaysia should focus more on services and digital industries, which do not require as much movement of goods or people.

“These sectors offer resilience and future growth potential,” he said.

Rethinking investment priorities

Ahmed Razman also recommended substantial investments in technology-driven and agile industries to build a more resilient economic structure.

 “Malaysia should consider investing in more resilient sectors such as technology and digitalisation.

“These industries can withstand external shocks more effectively and keep the economy moving even when global logistics are interrupted,” he said.

Pakistan’s airspace was closed, following escalating tensions with India, sparked by cross-border military strikes and retaliatory actions after a deadly attack in Kashmir. 

This disruption has forced multiple international airlines to reroute and cancel flights, adding to the ongoing global aviation strain caused by the Ukraine-Russia conflict, which has already restricted access to key air corridors in Europe.

The report said major airlines, including United Airlines, Korean Air and Lufthansa, altered their flight paths to avoid the affected airspace.

Tensions between the two neighbours, which have been rising since last month, escalated early Wednesday (May 7) due to cross-border airstrikes. 

-- BERNAMA