The Asia-Pacific Airlines Association (AAPA) held its annual gathering of airline CEOs in Bangkok this week. The mood of the two-day meeting, attended by Simple Flying, was described as cautiously optimistic, although recent months have given the CEOs plenty to be positive about.

Starting from a long way behind

As a region, aviation in Asia-Pacifc has gone through a really tough time these last three years, enduring some of the most prolonged travel restrictions on the planet. This has been particularly so in northeast Asia, where it's only in the last month or so that major traveling nations such as Japan, Taiwan, and the Republic of Korea have reopened borders.

On a year-to-date basis, Asia-Pacific demand, measured by revenue passenger kilometers (RPKs), is sitting at 42% of pre-Covid levels. Making the same comparison, North America has reached 87%, Latin America 83%, Europe 75%, the Middle East 70%, and Africa 42%.

Japan Airlines Boeing 787-9 Dreamliner JA863J (2)
Photo: Vincenzo Pace | Simple Flying

The reason the meeting, which was the 66th Assembly of Presidents, was buoyant has a lot to do with the last two months, as restrictions have virtually disappeared across the region, except, of course, for China and Hong Kong. AAPA director general Subhas Menon told the audience that by the end of the year,

"Asia-Pacific air traffic volumes will recover to at least two-thirds of the pre-pandemic levels. Full recovery may take another year at least, provided the global economic outlook doesn't get any worse."

The International Air Transport Association (IATA) has a bleaker outlook, showing Asia-Pacific not recovering fully to 2019 levels until 2025, two years later than North America. The clear message of the conference was that without China fully engaging in world air travel, Asia-Pacific can't reach its 2019 levels, which Menon characterizes as "China being the elephant in the room that's not in the room."

Capacity is well managed

In the first nine months of this year, Asia-Pacific airlines carried 62 million passengers, a five-fold increase over the same period in 2021. With most airlines adopting a very disciplined rein on capacity, available seats only expanded by 125%, leading to passenger load factors jumping by 40 points to 70%.

Air Astana, Airbus A321LR
Photo: Airbus

On the other side of the ledger, AAPA and its airlines see looming threats coming from rising inflation, economic uncertainty, geopolitical tensions and the strengthening US dollar. Menon said that as much as the outlook for air travel in Asia-Pacific looks bright, there are signs of economic weakness that could undermine that.

"That the industry's recovery coincides with a looming recession is a cause for concern [and] how much will this affect the recovery of international air travel?"

Sustainability was also a major topic of discussion, and AAPA has affirmed its commitment to the net zero by 2025 goal, which the International Civil Aviation Organization (ICAO)are recommitted to in October. Establishing a supply and delivery chain for sustainable aviation fuel (SAF) and reducing its cost is central to achieving net zero.

A key indicator is that forward bookings at their highest for years, and with the coming holiday seasons and Lunar New Year peak rapidly approaching, airlines can be confident about adding more capacity. Menon believes that's the answer to the current high-fare environment and that as capacity is added, fares will trend downward.

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Who is in AAPA?

Royal Brunei Airlines Boeing 787
Photo: Royal Brunei Airlines

AAPA is the industry body representing the interests of Asia-Pacific aviation. Its role includes addressing the critical policy issues that affect all carriers, including safety, security, the environment and infrastructure. Its member airlines are:

  • Air Astana
  • ANA All Nippon Airways
  • Asiana Airlines
  • Bangkok Airways
  • Cathay Pacific
  • China Airlines
  • Eva Air
  • Garuda Indonesia
  • Japan Airlines
  • Malaysia Airlines
  • Philippine Airlines
  • Royal Brunei Airlines
  • Singapore Airlines
  • Thai Airways

Do you think carriers in Asia-Pacific are handling the post-COVID recovery well?