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Asia Pacific lagging behind global aviation recovery

At the rate things are going, it will take years for Asia-Pacific to fully recover and get back to pre-COVID passenger numbers.

Asia took over as the hub of international aviation three years ago. It appeared like nothing could stop the region from pushing North America and Europe to one side with hundreds of aircraft waiting to arrive.

Even a few months ago, it appeared that everything would be OK if China simply opened its floodgates. If returning to pre-COVID levels of recovery is the goal, Asia-Pacific is hardly making any progress, and full recovery is still far off in the distance unless something drastic happens soon.

Around half of 2019’s passenger levels

The preliminary January 2023 traffic statistics were issued today by the Association of Asia Pacific Airlines (AAPA). The grim reality is that passenger traffic stagnates at just 52% of January 2019 levels, despite the fact that January 2022 was compared favorably.

The number of passengers transported by the region’s airlines in January 2019 increased to 32.2 million from 17.2 million in January 2023. Nevertheless, the capacity of airlines, as shown by available seat kilometers (ASKs), has only risen to 56% of 2019 levels. This helps keep costs high and boosts the passenger load factors for airlines, but it does not quickly increase the number of travelers.

It’s also concerning since after China reopened toward the end of last year, it appeared that January would have a corresponding increase in travel. It was logical to anticipate a jump in booking and passenger volumes around the end of the year and the Lunar New Year holidays in January, but this wasn’t the case.

Airlines operating in the Asia-Pacific region transported 16.1 million passengers in December, and 17.2 million in January, an increase of 6.6%—on its own, a healthy increase. It appears disappointing, nevertheless, when the aforementioned elements are taken into account. Data from 40 airlines, including the majority of the major carriers in the area, are combined by AAPA, the industry group for scheduled airlines based in the Asia-Pacific.

They include China Southern, Singapore Airlines, Cathay Pacific, Thai Airways, Qantas, Korean Air, and Japan Airlines. International passenger markets had a successful start to the year in 2023, according to AAPA director general Subhas Menon. Yet, he continued: “Strong demand, bolstered by an increase in leisure travelers during the Lunar New Year holidays in the area, saw the number of passengers transported by Asia Pacific carriers in January jump to 52.1% of pre-pandemic traffic levels in 2019.”

Only when compared to any of the COVID years and not the pre-COVID era is it possible to say that January this year was driven by robust demand.

AAPA chose 2022 as a benchmark, which allowed it to claim that the number of passengers carried was “more than seven times the volumes reported in the same month last year” and that the number of ASKs significantly increased by 195% annually. Although both of those assertions are entirely true, do they actually indicate how close we are to returning to pre-pandemic levels?

People must be put back in the air.

The passenger load factor, which rose from 42.4% in 2022 to 81.5% in January 2023, is another intriguing statistic. Although it was 82.1% in January 2019, it was still achieved with twice as many passengers. This is a remarkable reversal in capacity to demand matching, which is wonderful for airline earnings.

The challenge now is to encourage more people to fly, and to do that, airlines need to increase capacity online and lower prices. This is because populations are larger than in 2019. As some low-cost carriers have taken notice of the letter and are beginning to implement it, there is hope that competition will eventually step in and force airlines to act as it sees fit.

People want to travel, and borders are open, so there is a market, but will anyone use the opportunity?

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