Industry speakers discuss opportunities and challenges
ASIA-PACIFIC TRAFFIC POISED FOR QUICK RETURNAirlines in the Asia-Pacific region are planning for a strong rebound in traffic through 2023, with a full recovery to pre-pandemic levels predicted by early 2024.
Speaking at Routes Asia 2023, Association of Asia Pacific Airlines (AAPA) director general Subhas Menon said he expects a full recovery within the next 12 months now that China has reopened its borders and international capacity is returning to the market.
“I think Asia is like an elephant—it takes a bit of time to get up and get moving, but once it is, you shouldn’t stand in its way,” he said. “I think Asia-Pacific will come back very quickly. And my guess is that by early 2024, we will be getting back to 2019 levels.”
AAPA figures show that Asia-Pacific airlines carried a combined total of 105.4 million international passengers in 2022, compared to 17.4 million recorded in 2021. In 2019, airlines in the region carried about 375.5 million passengers.
Menon said that China represented about 20% of Asia-Pacific’s international traffic volume before the pandemic, which dropped as low as 2% during the crisis. He added that China’s strict COVID measures have held back the region’s recovery, but pointed out that the country’s reopening also offers “huge potential” for growth in the months to come.
Speaking during the same panel session, Pacific Asia Travel Association executive board member Mayur Patel agreed that traffic within the region should be back within nine to 12 months, despite roadblocks like labor shortages, high fuel prices and rising inflation rates.
However, ACI Asia-Pacific director general Stefano Baronci gave a more cautious view. He emphasized that 2019 traffic was yet to fully return in North America and Europe—which reopened far sooner than Asia-Pacific—and said “this is possibly a lesson that we can learn.”
– David Casey
VIETJET EYES AUSTRALIA AND MIDDLE EAST ROUTESVietnamese ultra-LCC Vietjet is exploring the potential of adding more destinations in Australia and growing its network into the Middle East, director of commercial Jay L Lingeswara told delegates.
Earlier this week, Vietjet confirmed that Sydney (SYD) would be its second city in Australia, with flights set to start four days after the airline makes its debut in the country. The inaugural service will connect Ho Chi Minh City (SGN) and Melbourne (MEL) from April 8, with flights linking SGN and SYD starting on April 12. Both routes will operate six times per week.
It is understood that Adelaide, Brisbane and Darwin are among the next cities in Australia on Vietjet’s agenda.
“Australia is a big market for us, and we are looking at Middle East expansion with the right aircraft in place,” Lingeswara said.
Alongside the Australia expansion, Vietjet has grown in Central Asia since the onset of the pandemic, with routes to Astana and Almaty in Kazakhstan. It is also now operating eight routes between Vietnam and India—up from just two before the COVID crisis.
In addition, the carrier plans to fully resume its flight network to China by June and offer nearly 100 flights a day by the end of the year.
Lingeswara said the country’s reopening would provide a further boost for the airline, which has already restored its entire pre-pandemic network with the exception of China. In 2019, Vietnam received more than 5.8 million Chinese visitors, accounting for 32.2% of the total international arrivals during the year.
Data provided by OAG Schedules Analyser show that Vietjet is offering some 2.2 million seats during February 2023, compared with 1.8 million at this time in 2019.
“Exciting times are ahead,” Lingeswara said. “The aviation industry suffers a lot of ups and downs, but it always come back stronger and better.”
RECALIBRATION OF ROUTES EXPECTED AS CHINA REOPENS There will be rebalancing of networks within Asia-Pacific following the reopening of China in early January.
Speaking as a conference panelist at Routes Asia 2023, Mayur Patel, executive board director at the Pacific Asia Travel Association (PATA), said the fragmented nature of the region meant that different markets have opened up at different speeds. With the dismantling of China’s border restrictions, there will be recalibration of routes to what is an important source market.
Network planners are also expected to re-forecast the demand coming from China, Patel said. For example, the Singapore-Bangkok route was sixth in the top 10 international routes but has slipped to 10th in place in recent months.
He added that network planning will become "tricky" once the pent-up demand loses steam, coupled with a "fragile" macroeconomics situation.
Association of Asia Pacific Airlines (AAPA) director general Subhas Menon warned of potential "man-made stumbling blocks," such as the reinstatement of testing of passengers coming from China. Other potential hurdles include a lack of human resources as well as geopolitical ones, such as the Russia-Ukraine war, which has blocked the use of Russian airspace for many airlines.
Stefano Baronci, director general at ACI Asia Pacific, said that processes introduced during the pandemic were insufficient to cope with the next black-swan event and he called for greater cross-industry collaboration to develop preventive and preparedness solutions and harmonized processes.
ICAO regional director Ma Tao said that as a regulatory agency, ICAO hopes to drive cooperation and information sharing between air navigation service providers to optimize routes and improve air traffic managements across the continents.
– Chen Chuanren
BETTER COORDINATION NEEDED BEFORE NEXT INDUSTRY CRISISGovernments must learn from mistakes made during the COVID-19 crisis and foster a more collaborative approach to help the industry withstand similar shocks in the future, Association of Asia Pacific Airlines (AAPA) director general Subhas Menon said.
He told delegates at Routes Asia 2023 that inward-looking policies and approaches adopted by many countries in the Asia-Pacific region have slowed the recovery and damaged economies.
“I think the last two or three years stands out for a lack of coordination and collaboration,” he said. “We were in such a mess because governments wouldn’t talk to each other—each country came up with their own regulations and requirements.”
Menon pointed out that passengers had struggled to cope with the different rules introduced by governments across the region. However, he said there was a “huge opportunity” to learn from these mistakes and put a platform in place to make the passenger journey smoother.
“We need to move forward with things like digital identity processing and biometrics,” he said. “We have to learn the lessons from the past and enhance the collaboration, implementing a system that makes it convenient for people to move from airport to airport.”
