Almost two years into the COVID pandemic, the global aviation market is beginning to pick up the pieces. However, recovery remains heavily influenced by geopolitical factors resulting in some markets taking longer to recuperate. While the US and Europe show signs of progress, things are moving at a slower pace in the Asia-Pacific region.
Speaking at the Assembly of Presidents of the Association of Asia Pacific Airlines (AAPA), director general Subhas Menon on Monday said that the slow rate of aviation recovery in the region has put millions of jobs at risk. The air transport sector accounts for $944 billion of Asia-Pacific GDP, with the region accounting for more than 50% of the 88 million employed in the industry globally. The pandemic has dealt a more severe blow in Asia-Pacific than elsewhere, with major social and economic implications.
International traffic in Asia-Pacific is at 6% of pre-pandemic levels compared to an average of 40% in other regions. According to AAPA, in September, the region’s airlines carried 1.2 million international passengers, around 4.1% of the 30 million recorded in the same month of 2019. The international passenger load factor averaged by 33%, while available seat capacity was 13.9% of pre-pandemic levels.
In August, Menon observed that the world could be divided into two blocks – the first includes regions such as the US and Europe with successful vaccination campaigns that allow travel to pick up faster. The second is the Asia-Pacific region, where the rate of vaccination is gradually catching up.
Apart from vaccinations, strict COVID-19 testing requirements have also disincentivized travel. While it’s crucial to vet international passengers before entry, the process needs to be standardized to avoid confusion in an already stressed-out traveling environment.
Aviation supports nearly 47 million jobs in Asia-Pacific. The region is so heavily dependent on aviation as an essential means of transportation that the resumption of international air services is urgently needed to restore global connectivity and reunite people with their loved ones.
According to AAPA, significant differences in reopening strategies have hampered reciprocal travel restart. While some countries allow vaccinated passengers without any quarantine requirements, some in the region are closed except for essential travel. But gradual harmonization of border policies and health protocols in recent times will certainly help reduce anxiety and confusion in travelers.
While passenger traffic is still nowhere near pre-pandemic levels, cargo operations have provided the much-needed cushion for airlines to brave these times. AAPA believes that strong consumer and business sentiment has boosted trade activity, benefitting air cargo markets. Congestion at major shipping ports and associated global supply chain disruptions have also led to businesses turning to air cargo to speed up deliveries.
While cargo revenues accounted for nearly 1/3rd of the revenue during the pandemic, it’s still not enough to mitigate the loss of passenger traffic. As such, even as cargo continues to be on an upward trajectory, passenger traffic must pick up for aviation to normalize.
Vaccine rollout is also picking up pace in the region. New Zealand has fully vaccinated 80% of its population, and Australia is catching up as well.
Business travel will take some time to recover, but the VFR (visiting friends and relatives) segment has shown remarkable resilience to bounce back. In September, an IATA survey in 11 markets, including Australia, India, Japan, and Singapore, showed a huge appetite for leisure travel among people and their growing confidence in effective COVID management.
Hopefully, with greater vaccine coverage and more standardized border protocols and traveling requirements, aviation in Asia-Pacific will recover sooner rather than later.