Neelam Mathews

A virtual stop to international arrivals resulting from China’s zero-Covid policy has put a damper on the post-pandemic growth of major Southeast Asian airlines for whom China accounted for one-third of their market share in 2019.&nbsp;

 


Business will grow faster when China opens its market around mid-2023, an optimistic Subhas Menon, director general of the Association of Asia Pacific Airlines (AAPA) told AIN.&nbsp;“It is a closed market and not welcoming visitors except for its own resident passengers,” he said. “Asia-Pacific airlines are not flying there mainly because of [long] quarantine required. It is a fly in the ointment.”&nbsp;

 


According to the Center for Aviation (CAPA), since the second quarter of this year, some Asia-Pacific airlines have quickly increased international capacity as their governments have eased border restrictions. “But there are still only a handful that have outpaced Singapore Airlines,” it said in a statement. “[Its] steady capacity increase will continue through 2022, although eventually, it will need China to reopen in order to recover fully to pre-pandemic levels.”&nbsp;

 


Asia-Pacific carriers will try to draw traffic from the rest of the world, including the U.S., to help compensate, said Menon. “These are low-hanging fruits,” he explained. “The missing link is China.”&nbsp;

 


Menon added that airlines continue to seek opportunities as many borders open. “We are seeing revenge travel,” Menon noted in reference to a traffic surge following years of travel curtailment. He added Australia and New Zealand had removed restrictions on travel and Singapore had all quarantine requirements lifted starting August 29. “India [too] is fantastic,” he said. “It&nbsp;is becoming more and more [important] for Asia-Pacific carriers and so are Indonesia and the Philippines.”

 


Meanwhile, strict measures in Japan and South Korea—major markets for South East Asia—have begun to ease. Starting September 7, daily international arrivals to Japan will increase from 20,000 to 50,000, but only for groups. Disposing of some of its last border controls, South Korea will withdraw Covid-19 tests at departures starting September 3.&nbsp;

 


Challenges and cost pressures remain. Geopolitical tension has resulted in high operating costs. Fuel, salaries, materials, and supply chain costs have all risen, while governments have delayed adopting a seamless open architecture to bring a commonality in identity verification for e-passports.

 


Menon said few Asian airlines retrenched their pilot ranks. “Instead, they were furloughed and put on other jobs,” he said. “So pilots are not an issue here.”&nbsp;

 


Airlines need to bring back capacity quickly, said Menon, who expects the market to return to 75 percent of 2019 levels by the end of this year. “If governments had opened borders earlier, it would have helped airlines to plan and rebound faster,” he explained. “But this is a resilient industry. We saw how innovative airlines were with cargo during the pandemic...Hong Kong’s Cathay Pacific, for instance, is&nbsp;using this period to ramp up.”

 


AAPA hopes to add a major Indian airline as part of its 14-member community. "We have a common agenda regarding matters and issues relating to the Asia Pacific aviation industry,” said Menon.&nbsp;

 


According to AAPA, the region’s airlines flew 11.3 million international passengers in July, surpassing 10 million for the first time since February 2020. In contrast, international air cargo demand in freight tonne kilometers dropped by 11.6 percent year-over-year.&nbsp;

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