According to a recent analysis, Asia-Pacific airlines are expected to experience a continued improvement in their fortunes in 2024, despite significant hurdles. The report stated that the industry’s recovery from the COVID-19 pandemic in 2023 was uneventful. However, it revealed that international seat capacity was 36% less than domestic seat capacity, which had already exceeded 2020 levels
China’s domestic capacity increased by 13% more than in 2019, while international capacity fell by 49%, which had a particularly strong impact on Japan. Indonesia’s recovery was also slower compared to other regions. As a result, Japanese airlines and other carriers in the area had to shift their focus to other markets such as Hong Kong and Europe due to the sluggish Chinese travel rebound. Nonetheless, there is still a chance that Chinese international travelers will return to Southeast Asia, given the visa-free agreements between China and countries like Malaysia, Thailand, and Singapore.
It is expected that there may be an increase in the number of tourists visiting Southeast Asia, which will require the expansion of airport and airline capacity in the region.
However, despite the anticipation of increased airline profitability in the area by 2024, It has been identified several obstacles to expansion.
These risks include rising interest rates, the strength of the US currency, and higher fuel prices brought on by international crises. Many major cost items, such as maintenance, repair and overhaul (MRO) and spare parts, jet fuel, and aircraft financing, are transactional in nature and are denominated in US dollars.”
