OUR L EADERSH I P S TAT EMENT www.malaysiaairports.com.my 29 MANAGING DIRECTOR’S MESSAGE Among the highlights of the year was EZPaz. We branded the biometric facial recognition system at KUL as ‘EZPaz’ and rolled out the solution for Malaysia Airlines’ and AirAsia’s domestic flights. The system enhances airport security with the use of biometric data and delivers an enhanced seamless experience for passengers as they only need to show their documents once at check-in. Subsequently the system’s biometric facial recognition capability will identify passengers, eliminating the need for the traditional boarding pass and identification documents at airport checkpoints. The MYairports mobile app was further enhanced and relaunched. It offers a convenient method for passengers to access a comprehensive range of information and features that assist passengers on their journey through KUL. This includes the EZPaz, the Butterfly Effect for persons with hidden disabilities, flight information and tracking, wayfinding, special assistance information and one-click access to the shopMYairports shopping site. The Group also kicked off several multi-year digitalisation projects. The Airport Collaborative Decision Making project kicked off with the signing of a Memorandum of Understanding by Malaysia Airports and key stakeholders, namely CAAM, airlines and ground handling companies. The project will enable national aviation players to access and share real time data, and collaborate to improve operational efficiency and process flow at KUL. Other projects include Self Service Bag Drop and the Airport Integrated Security and Safety System which are slated to complete in 2023 and 2024 respectively. Non-aeronautical revenue boosted The non-aeronautical segment revenue increased by 80.5% YoY to RM1,206.5 million, largely due to better contribution of commercial revenue from operations both in Malaysia and Türkiye. For operations in Malaysia, revenue grew from commercial spaces as passenger traffic recovered. In addition, we put in place early groundwork to secure premium brands and first- to-market opportunities at the airports such as Jamie Oliver and Taco Bell, which opened their outlets in January 2023. Sale of duty free and non-dutiable goods in Malaysia through the Group’s retail arm, Eraman, has traditionally correlated closely with the level of international passengers. However, in 2022, the business recovered rapidly with the passenger spending rate by end-2022 outstripping the recovery rate of international passengers, and higher than pre-pandemic levels. Eraman’s sales per ticket improved in 2022 to RM280 compared to RM233 in 2019, despite lower passenger numbers in 2022. This was also achieved on the back of workflow improvements in floor management capabilities and redeployment of staff to retail and F&B outlets to match demand. In addition, Eraman worked closely with partners to ensure that products were restocked promptly while managing increased freight costs to overcome supply chain issues as passengers looked to release pent-up demand for travel retail products. In our operations in Türkiye, duty free rental income grew 82.5% YoY to EUR62.6 million, an all time high. This was mainly driven by the increase in international passengers by 75.1% combined with the efforts of our duty free partner, Dufry, which capitalised on the higher proportion of international passengers and the implementation of numerous campaigns including cross sales promotions among different F&B outlets, retailers and duty free shops. Proactive financial management Proactive financial management has also improved Malaysia Airports’ bottom line. In 2022, the Group raised RM800 million Senior Sukuk across two tranches, through its Sukuk Wakalah Programme, to take advantage of the prevailing benign interest rate environment at the time of issuance. With both tranches oversubscribed, the issuance of the RM500 million tranche closed at a 3.79% coupon rate while the coupon rate for the remaining RM300 million was 3.98%. The funds was used to retire debt with a coupon rate of 4.68%, resulting in the average funding rates for ringgit debt moving down from 4.53% to 4.29%. Duty free rental income at SAW grew 82.5 % YoY
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