MALAYSIA’S aviation sector is bracing for reduced revenues as regional conflicts force flight rerouting, disrupt supply chains, and dampen tourism, according to experts, who say the situation demands a strategic shift towards digital development and trade diversification.
The closure of Pakistan’s airspace amid heightened tensions with India, coupled with the prolonged impact of the Ukraine-Russia conflict, has disrupted global flight routes. This has resulted in longer journeys, higher operational costs, and rising logistic expenses for airlines operating in and out of Malaysia.
Bernama cited Putra Business School Associate Professor Dr Ahmed Razman Abdul Latiff saying the increased distance and complexity of flight paths are weighing heavily on both freight and passenger traffic.
“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 added that safety concerns, stemming from ongoing geopolitical tensions, are also influencing travel decisions, particularly among outbound Malaysian travellers.
“Malaysians may consider postponing their travel arrangements, especially long-haul flights, due to fears of incidents similar to MH17,” he said.
In light of these developments, Dr Ahmed Razman emphasised the need for Malaysia to recalibrate its economic strategy, with a particular focus on sectors that are less dependent on international logistics.
“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 explained.
He urged policymakers to give priority to the services and digital economy sectors, which offer greater resilience and are less vulnerable to disruptions in physical movement.
“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.
Dr Ahmed Razman also called for targeted investments in high-tech and agile industries to future-proof the Malaysian economy.
“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 added.
Pakistan’s airspace closure, prompted by cross-border military strikes following a deadly attack in Kashmir, has added to the strain already placed on international carriers by the conflict in Ukraine.
Major airlines such as United Airlines, Korean Air, and Lufthansa have rerouted or cancelled flights to avoid the affected regions, compounding disruptions to the global aviation network. - May 9, 2025
