Continued supply chain issues affecting the delivery of new aircraft and maintenance upkeep times for the existing fleet is one of the biggest potential risks to expected growth this year among Asia-Pacific airlines.
Association of Asia-Pacific Airlines (AAPA) director general Subhas Menon says carriers in the region are expected to contribute around half the global industry’s traffic growth this year, as they continue building back after a relatively late re-opening from Covid travel restrictions.
Preliminary data for 2023 from AAPA shows international passenger numbers for carriers in the region jumped from 107 million in 2022 to almost 279 million – an increase of around 160%.
”On average in 2023, in terms of demand, we were back to 72% [of 2019 levels] overall,” Menon tells FlightGlobal. ”In December it was 80%.
”It [the traffic recovery] would have been stronger if supply chain issues had not hampered the timely delivery of aircraft and spares, and parts. It is an ongoing issue, not only in the Asia-Pacific region. But the Asia-Pacific region’s recovery coincided with the supply chain issues. That is holding back the numbers returning to what they were.”
Menon highlights the strong improvement in passenger load factor, which climbed nearly nine percentage points to 80.9%. “That is as strong as they were pre-Covid. So business as usual. If you look at 10 busiest routes, seven of them are in Asia,” he says.
However the pace of recovery across the region remains a mixed picture. “ASEAN is probably already at 80, 85% [of 2019 levels]. But if you are talking about North Asia, maybe they are closer to two-thirds of where they were,” says Menon.
China was the last major market in the region to reopen after the pandemic, as restrictions were fully lifted last May. “The Chinese recovery has been very muted, much less than expected,” says Menon. ”That’s mainly because of economic factors. I would say they are about 50% of where they were before Covid.”
He notes that China’s civil aviation authority anticipates that the country’s passenger traffic will be back to 80% of pre-pandemic levels by end of the year.
While air freight levels were down 3% across the year, it still remains higher than it was before the pandemic. Notably, after 18 months of decline, international air cargo traffic has picked up for carriers in the region since September.
Menon adds: ”For all intents and purposes, this industry in the Asia-Pacific region has also recovered fully because if you look at operating profits, airlines are profitable again, and margins are where they were, more or less.
”There is a lot of cause for optimism and the airlines are working hard to ensure the profitability they are enjoying now continues well into the future.”
