The Association of Asia Pacific Airlines (AAPA) is positive on the outlook for 2025 as it assembles for its annual meeting.
“As far as the key metrics that airlines keep in mind, we are already back to business as usual,” says Subhas Menon, director general of the AAPA.
“Load factors are higher than pre-Covid levels and even though yields are coming down quite fast, they are also higher than pre-Covid.”
Menon feels that international RPKs will grow 10% in 2025.
He made the remarks in Bandar Seri Begawan, where the AAPA is holding its 68th Assembly of Presidents. The event is an annual fixture for the region’s airline leaders.
Despite the growth, airlines continue to grapple with supply chain issues that impact aircraft availability. While lessors can help fill capacity, leased aircraft are equally prone to supply chain challenges.
Late deliveries of aircraft are also a problem. This is a particular issue for airlines in fast growing countries like India. While carriers in India boast significant orderbooks, it is a challenge for them to boost capacity in the absence of timely deliveries.
As for specific markets, Menon says that inbound traffic into China has largely recovered, mainly due to Beijing’s easing of visa requirements.
In contrast, China’s outbound international traffic has recovered to only 55% of pre-pandemic levels.
“Travelling to China is becoming more attractive and people are going in, but outbound is pretty bad,” says Menon.
“The Chinese government wants to try and keep expenditure within China, so domestic travel is doing very well. They are not introducing many incentives for people to go and spend their money overseas.”
Irrespective of China, Menon feels that international traffic in the region will “reach or exceed” 2019 levels by the end of the year.
“Meanwhile, if the China market is not responding as quickly as the airlines want, they will fly somewhere else.”
