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Covid-19 tests now required for Langkawi

■ Ministry of Health mandated negative Covid-19 tests for travellers before they can depart to Langkawi under the domestic travel bubble starting 16 Sep.
■ The cost of each test can be as low as RM16, suggesting that the cost of testing should not be an impediment to the success of the travel bubble.
■ Reiterate Overweight on the Malaysian aviation sector, with MAHB (Add) as our top pick. AAGB remains a Reduce.

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Ministry of Health (MOH) issued new testing requirements today

The Malaysian domestic travel bubble to Langkawi started today, 16 Sep; we analysed the implications for AAGB and MAHB in our 14 Sep report. In that report, we wrote that Covid-19 tests were not mandatory, as per the initial announcement on 9 Sep by the Ministry of Tourism, Arts and Culture. However, things changed suddenly in the afternoon of 15 Sep when the MOH said that testing was now required for all visitors to Langkawi above the age of 7.

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Air travellers to Langkawi have three different options to satisfy the testing requirement: (1) Do the Reverse Transcription–Polymerase Chain Reaction (RTPCR) swab test at a laboratory or hospital 48 hours prior to travelling; (2) Do the Rapid Test Kit (RTK)-Antigen swab test at a laboratory or hospital 48 hours prior to travelling; or (3) Purchase saliva self-testing kits (either from the local pharmacy or at the airport itself) and perform the saliva test at designated screening sites at various airports in the presence of MOH staff. According to MAHB, designated screening sites are available at the departure areas or public concourses of the Kuala Lumpur International Airport (KLIA) Main Terminal, klia2, Penang Airport, Subang Airport, Kota Bahru Airport, and Ipoh Airport. We believe that MMC-operated Senai Airport should also have something similar.

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Cost of self-test kits affordable at only RM16 each…

The cost of testing can vary widely, depending on which test is chosen. BP Healthcare charges RM240 for the RT-PCR swab test, while Sunway Medical Centre in KL charges RM138 for the RTK-Antigen swab test; both these tests require laboratory facilities, hence their high cost. By contrast, the government has set a price ceiling of RM19.90 for
self-test kits, which can be purchased for RM16 at local pharmacies around the Klang Valley, based on our checks. Travellers purchasing the self-test kits for RM16 each can bring them to the airport and no further charges will be imposed by either the airport or MOH. This makes the additional requirement of testing very low, and should not dissuade domestic Malaysian travellers from making their way to Langkawi, in our opinion.

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…but less efficacious than Phuket’s mandatory RT-PCR test

In the Phuket Sandbox programme, both international and domestic travellers need to be vaccinated against Covid-19 and also have to clear RT-PCR tests, which have an accuracy of almost 100%. In the Langkawi instance, less-accurate saliva self-test kits are admissible, with accuracy of at most 94%, according to pharmaceutical sources. Despite
the introduction of a testing regime as part of the Langkawi travel bubble, there is still risk of Covid-19-infected travellers entering Langkawi, potentially causing outbreaks and clusters on the island, and some newly-infected travellers may bring the virus back to their home states. These risks may be higher for the Langkawi travel bubble than for the Phuket Sandbox programme, due to the lower stringency level of the Covid-19 tests for Langkawi. As a result, the Langkawi travel bubble may be paused in the future if infection outbreaks happen. Certainly, the domestic travel reopening will not necessarily progress in a straight line; we expect starts and stops along the way.

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MAHB the straightforward beneficiary

Nevertheless, the outlook for the aviation industry is looking brighter. The restoration of airline capacity and air travel to Langkawi is positive for MAHB, because of the increased pax traffic and low air fares coupled with the ongoing hotel promotions in Langkawi. Airlines like AAGB will also benefit, although in the initial phase, it may have to contend with strong competition, low fares, uneven loads on outbound and inbound flights, and the presence of passengers using their credits from previously-cancelled flights.