Asia-Pacific airlines recovery may lag behind other regions

Until two years ago, the Asia-Pacific region was hailed as the engine of global aviation growth.A rising middle class, developing economies, and sheer population numbers meant airlines in the region had every reason to be optimistic.But IATA’s latest forecast underlines the devastating impact of Covid-19 on the region, which is now expected to achieve real growth only in 2025. The 2019 levels may now be achieved in 2025 (109%) due to a slow recovery on international traffic in the region, the global body of airlines says.At that time, Asia-Pacific growth would lag that of other regions. It is estimated that Asia-Pacific will only reach 2019 levels by 2025, a full year behind the rest of the world!The continuation of international travel restrictions, and the likelihood of renewed domestic restrictions mean that, this year, traffic to and from and within Asia Pacific will only reach 68% of 2019 levels, the "weakest outcome" of the main regions.Data highlights the slow pace of recovery – the region's airlines carried 16.7mn passengers last year, just 4.4% of volumes seen in 2019, according to the Association of Asia Pacific Airlines (AAPA).“You need to look at the background to find the reason for this,” says Philip Goh, IATA’s regional vice president for Asia-Pacific. “In 2003, we had the Sars outbreak and governments in the region remembered that and were very fast in closing borders when the pandemic struck.“Because this was quite successful in the early days and the region had far lower infection rates than Europe and the United States, there was not the same push to get people vaccinated initially” he noted. “The end result is that travel restrictions were quite strict and have remained in place for longer,” Goh said. The region’s air travel recovery is also dependent on airlines being in alignment with industry partners. On the whole, governments have been supportive, introducing cost relief, reduced parking charges, and other incentives to assist airlines through the crisis.Some air navigation service providers have played their part too. Those in Australia, Indonesia, and India, for example, all took the opportunity to improve operational efficiency options for airline customers. Unfortunately, some Air Navigation Service Providers (ANSPs) increased charges or have indicated that they intend to do so, and IATA continues to consult with the appropriate parties on this matter.The challenge now is to accelerate the recovery of air travel in the region, IATA says.On the plus side, vaccination rates have improved quickly, and borders are beginning to open. Australia started welcoming international travellers in February, and such other countries as Malaysia, the Philippines, Singapore, South Korea, Thailand, and Vietnam have announced the gradual easing of restrictions.The main problem is with the larger markets, including Japan and New Zealand. The latter will only accept fully vaccinated travellers from visa waiver countries from May 1. The country is due to fully reopen in October this year although this could be brought forward.“Given the decisions to date, we don’t expect all travel restrictions to disappear in one go,” says Goh. “But there should be a rapid step-by-step process. So, first get rid of quarantine requirements where they exist and then move on to testing and begin to downscale and then dispense with that. As we move forward, we are hopeful that these incremental improvements will gather pace.”Goh insists that the pent-up demand for air travel is obvious as every reopening has been met with a surge in bookings. Studies have shown beyond doubt that the aircraft cabin is not a significant vector for the spread of the virus and in fact is far safer than most public environments. Similarly, passenger surveys reveal that airline customers are confident in air travel health safety measures. When combined with ever-increasing vaccination rates and milder variants, the appetite for travel grows stronger by the day.“People want to connect with family and friends,” insists Goh. “As we saw in the west, some customers are still wary of travel restrictions being implemented at short notice, but those concerns are fading fast.”Clearly, captains of the aviation industry hope the remaining three quarters of the year will mark a turning point in a region, where tough curbs have left Covid-battered airlines struggling to recover, and in some cases, survive!Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn