Malaysia is urging Indian airlines to look beyond Kuala Lumpur and expand their networks to Penang and other regional cities, as the Southeast Asian nation chases higher-yield tourism and more balanced growth across its destinations. With Indian arrivals crossing the one million mark in 2024 and new visa and route incentives in place, Malaysian tourism and aviation officials see an opportunity to deepen connectivity between India’s booming outbound market and Malaysia’s secondary gateways.
Malaysia’s Pivot Beyond Kuala Lumpur
For years, Kuala Lumpur International Airport has been the primary gateway for Indian travellers, capturing the lion’s share of bilateral seat capacity between the two countries. Flag carrier Malaysia Airlines, low-cost giant AirAsia and Indian carriers such as IndiGo and Air India have focused most of their capacity on trunk routes linking the Malaysian capital with Delhi, Mumbai, Chennai, Bengaluru and other metros. That strategy helped underpin steady growth, but it also created a concentration risk and put pressure on bilateral seat entitlements for major Indian cities.
Now, Malaysian authorities are openly encouraging a shift. Bilateral flying rights between India and Malaysia are heavily utilised on metro sectors, leaving limited room for additional frequencies to Kuala Lumpur on popular routes. By contrast, services into non-metro and secondary points in India and Malaysia remain less constrained. Tourism and aviation planners in Kuala Lumpur are therefore signalling to Indian carriers that future growth lies in bypassing the capital and flying directly into destinations such as Penang, Langkawi and other regional cities.
Indian airlines have started to respond. IndiGo, India’s largest carrier by market share, has steadily widened its Malaysian footprint, adding new points beyond Kuala Lumpur. Air India has also joined the push, launching nonstop services from Delhi to Kuala Lumpur in 2024 as part of its broader international expansion. These moves mark the beginning of a more diversified route map that Malaysia hopes will increasingly spotlight its secondary gateways.
Penang Emerges as the Flagship Regional Gateway
Penang is at the centre of Malaysia’s strategy to push beyond Kuala Lumpur. Long known for its heritage architecture, multicultural street life and acclaimed food scene, the island is now being positioned as a stand-alone entry point for Indian visitors. The breakthrough came with IndiGo’s launch of daily direct flights between Chennai and Penang in December 2024, giving the state its first-ever direct air link to India.
That route quickly validated the state’s ambitions. According to Penang officials, the Chennai–Penang service has operated hundreds of flights and carried well over 100,000 passengers with healthy load factors since its launch. The performance has been strong enough that India has surged into Penang’s top ten source markets, ranking among the state’s most important international feeders for both air and cruise arrivals.
On the back of that success, Penang’s tourism and economic planners have already opened talks with IndiGo on expanding direct Indian connectivity further. State representatives have used their “Simply Penang” roadshow in key Indian cities to court airlines and tour operators, signalling that more direct routes from India to Penang are on the table. For Indian carriers, Penang offers a compelling proposition: a destination with strong brand recognition, robust mix of leisure and business demand, and less congestion than Kuala Lumpur.
Visa Liberalisation and the Indian Travel Upswing
Malaysia’s renewed push for Indian connectivity is anchored in striking tourism numbers. In December 2024, Tourism Malaysia announced that the country had already surpassed its target of one million Indian visitors for the year, recording just over 1,009,000 arrivals between January and November. That figure represented a near 72 percent jump compared with 2023 and a sizeable increase over pre-pandemic 2019 levels.
Much of that surge is credited to Malaysia’s decision to offer free visa entry for Indian tourists from December 2023. The move significantly reduced friction for Indian travellers, especially those considering short leisure breaks or spontaneous group trips. Coupled with an expanding web of low-cost and full-service routes, the visa policy helped unlock pent-up demand after the pandemic, particularly among young professionals and families in India’s tier-two and tier-three cities.
For airlines, the demand spike has translated into higher load factors and more confidence to experiment with new destinations. IndiGo has added multiple daily services from India to Malaysian points such as Kuala Lumpur, Penang and Langkawi, while AirAsia has aggressively grown its India network from Kuala Lumpur, including to secondary cities like Jaipur, Bhubaneswar and Kozhikode. Malaysia Airlines, meanwhile, has restarted or expanded services to cities like Kolkata and beefed up capacity to Amritsar and Ahmedabad.
Indian Carriers as Partners in Regional Tourism Growth
As Malaysia looks to distribute tourism flows beyond the capital, Indian airlines are seen as critical partners rather than mere competitors to its homegrown carriers. Indian carriers bring strong brand awareness in their home market, extensive domestic connectivity and the ability to feed passengers from multiple Indian cities into a single international departure point, be it Chennai, Delhi or Mumbai.
IndiGo’s Chennai–Penang flight offers a case study in this model. By using Chennai as a hub, the airline can connect passengers from cities across southern and eastern India on to a single nonstop service to Penang. This structure allows Malaysian tourism authorities to tap demand from regions that would otherwise face time-consuming and often costly connections via Kuala Lumpur or Singapore. For Indian travellers, the benefit is a smoother journey with a familiar carrier from origin to destination.
Air India’s expansion has a similar effect from northern India. Its daily nonstop service from Delhi to Kuala Lumpur offers new one-stop options for travellers from the vast hinterland of north and central India, where the national carrier’s domestic network remains extensive. As Malaysia nudges Indian airlines to trial more direct flights into destinations such as Penang and potentially Kota Kinabalu or Kuching, the underlying logic is the same: leverage Indian carriers’ domestic strength to funnel visitors straight into regional Malaysian gateways.
Opportunities Beyond Penang: Langkawi and Emerging Regional Hubs
While Penang is currently the primary beneficiary of India-focused route development beyond Kuala Lumpur, it is not the only regional destination in Malaysia with ambitions in this space. Langkawi, long marketed as an upscale island escape with beach resorts, duty-free shopping and nature-based activities, has already attracted direct Indian services from IndiGo. Those flights, launched alongside Penang connections, underscore Malaysia’s intention to present multiple island gateways to Indian holidaymakers.
Elsewhere, secondary cities on the Malaysian peninsula and in East Malaysia are also being positioned for future growth. AirAsia, which dominates Malaysia’s short-haul low-cost market, already operates a dense domestic network into Penang and other regional airports from Kuala Lumpur, Johor Bahru, Kota Kinabalu and Kuching. That domestic backbone could eventually support international services from certain regional points to Indian cities, particularly where there is strong demand from visiting friends and relatives, medical tourism or niche leisure segments.
Malaysian tourism planners are keen to ensure that new Indian routes do not simply replicate the well-trodden Kuala Lumpur circuit, but instead open access to different types of experiences. Heritage-rich cities, food destinations, eco-tourism hubs and emerging cultural festivals in Malaysia’s northern and eastern corridors are all being promoted more aggressively to Indian tour operators. Over time, point-to-point connectivity from India to such regional centres could help balance the flow of visitors and reduce pressure on the capital’s tourism infrastructure.
Tourism Strategies: Roadshows, Partnerships and Cruise Synergies
To translate aviation opportunities into sustainable arrivals, Malaysia has stepped up its tourism promotion efforts in India. State and national tourism bodies have mounted targeted roadshows in key source cities, combining airline negotiations with trade partnerships and media outreach. Penang’s “Simply Penang” campaign, which has visited major Indian metros including Mumbai, Delhi, Kochi and Chennai, is a prime example of this coordinated approach.
These roadshows typically bring together representatives from state tourism boards, hotels, event venues, medical tourism providers and local tour operators. Indian travel agents and wholesalers are offered curated itineraries that highlight what regional Malaysian cities can offer beyond Kuala Lumpur or Genting Highlands, from heritage walks and street food tours in George Town to island-hopping and cultural experiences in Langkawi and other coastal regions.
Cruise tourism is another pillar of Malaysia’s outreach to India. Penang’s Swettenham Pier Cruise Terminal has recorded robust growth in Indian cruise passengers, with India now ranking among its top source markets. As more cruise lines homeport or deploy ships in Southeast Asia, Malaysia is working to ensure that its ports are integrated into itineraries that appeal to Indian travellers. Stronger air connectivity from India to Penang and other coastal cities makes it easier to sell cruise-and-stay packages, further reinforcing the case for Indian airlines to serve these ports directly.
Balancing Capacity, Bilateral Rights and Market Realities
Despite the upbeat tone, the shift toward regional gateways is also shaped by hard constraints. The bilateral air services agreement between India and Malaysia caps the total seats that airlines from both sides can operate on designated city pairs, and much of that capacity is already utilised on popular metro routes. For Indian airlines keen to expand in Malaysia, the path of least resistance increasingly lies in serving alternative Malaysian points rather than trying to squeeze additional frequencies to Kuala Lumpur.
Malaysian carriers face a slightly different challenge. While they can redeploy capacity from Kuala Lumpur to secondary Indian cities where bilateral restrictions are not binding, they must also manage fleet, crew and cost pressures. Malaysia Airlines has publicly acknowledged operational constraints and has at times temporarily reduced parts of its network while it works through supply chain issues. Nonetheless, the airline has continued to prioritise India as a key growth market, restoring routes and raising frequencies where commercially viable.
Low-cost carriers such as AirAsia add another dimension. Their ability to quickly test new routes using narrow-body aircraft on relatively short sectors between India and Malaysia makes them well-suited to pioneering services to non-traditional city pairs. However, they too must balance the risk of seasonality, fare competition and currency volatility. For Malaysia’s strategy to succeed, demand from both Indian leisure travellers and niche segments such as medical tourists, students and business visitors will need to support sustainable year-round operations.
What This Means for Indian Travellers and the Future of the Corridor
For Indian travellers, Malaysia’s encouragement of flights beyond Kuala Lumpur promises more choice and, over time, greater convenience. Direct access to Penang and other regional cities can significantly cut travel time, eliminate layovers and open up itineraries that once required backtracking through the capital. It also allows travellers to tailor trips around specific interests, whether that is history and culture in Penang, island leisure in Langkawi or eco-tourism in lesser-known Malaysian regions.
In the medium term, travellers can expect a more competitive marketplace. As Indian carriers and Malaysian airlines vie for share on both established and emerging routes, fares are likely to reflect that competition, particularly during promotional periods. New route launches almost invariably come with introductory offers, which can be especially attractive for Indian families and groups exploring Southeast Asia for the first time or returning for repeat visits.
Looking ahead, the India–Malaysia corridor appears poised for further diversification. With strong underlying demand, visa facilitation and clear policy signals from Kuala Lumpur, regional gateways are set to play a growing role in how Indian travellers experience Malaysia. Penang’s early success as a direct entry point may well serve as a blueprint for other secondary cities, while Indian airlines continue to evaluate underserved city pairs that can sustain regular services.
If current trends hold, future Indian visitors may be just as likely to begin their Malaysian journey in Penang’s historic George Town or on a northern island beach as in the skyscraper-lined avenues of Kuala Lumpur. For Malaysia’s tourism planners, that outcome would mark not only a win for regional development, but also a tangible payoff from their push to bring Indian airlines, and Indian tourists, beyond the capital and into the country’s wider mosaic of destinations.