From a LinkedIn post by Philip Goh, Regional Vice President, Asia Pacific
A year ago, I wrote a LinkedIn post in which I urged Asia-Pacific states not to reintroduce COVID-19 testing on travellers from China, as there were fears of a new wave of COVID infections from anticipation of a surge in visitors from China after border reopening.
The fear proved unfounded as a sharp increase in visitors from China did not materialize. It also slowed the region’s aviation recovery.
Pre-COVID, China was a major source of foreign visitors to many countries in the Asia-Pacific. In some cases, Chinese travellers accounted for as much as 20-30% of total visitor arrivals. While China reopened her borders early in 2023, the Chinese government only allowed the full resumption of group outbound tours during the 2nd half of 2023. International flights serving China is still less than 60% of 2019.
As of October 2023, total passenger demand in the Asia Pacific was back to 90% of pre-COVID levels. This is driven by domestic demand - domestic markets in China and India are already above pre-COVID levels.
International recovery has been slower, reaching only 80% of pre-COVID levels. It is not surprising that Asia-Pacific lags other regions since the region started reopening international borders gradually during Q2 and Q3 of 2022 while other regions started from 2021.
Supply chain issues and manpower resource constraints also affected the region’s airlines’ ability to add capacity to serve the strong demand.
Despite the longer recovery period, we can be optimistic about the potential of the region. IATA expects Asia-Pacific to be back to pre-COVID levels in 2024. And the region is expected to be the fastest growing region over the next 20 years, with China, India, Japan, Indonesia, Thailand, and Vietnam among the top 15 largest passenger markets.
As we look ahead to the new year, infrastructure continues to be an important focus. Infrastructure constraints, both in airports and airspace, can have a dampening effect on the anticipated growth of the region over the next 20 years.
And the industry needs to be able to grow sustainably. Sustainable aviation fuels (SAF) are an important pillar of the roadmap for airlines to achieve net zero by 2050. There is a need to increase the supply of SAF. Governments in the region need to put in place supportive policies to encourage SAF production.
These will be important areas of focus as we ring in 2024.
I wish all airlines continued recovery in 2024 and a Happy New Year!
