Asia-Pacific Airlines Face Slow Recovery due to Rising Costs, Supply Chain Issues, and Slow Return of Chinese Travelers

Industry Leaders Meet at Singapore Summit to Address Challenges in Rebuilding Capacity, High Fuel Prices, and Fragile Recovery of Chinese Tourism Amid Geopolitical Tensions and Supply Chain Disruptions

• At the Association of Asia-Pacific Airlines (AAPA) summit, industry leaders discussed the major hurdles facing the aviation sector including high fuel prices, geopolitical tensions, and supply chain disruptions.
• Asia-Pacific airlines face difficulties in achieving a recovery equal to pre-pandemic levels as international passenger capacity has only reached about 73% due to various headwinds. These include the slow return of Chinese travellers and increasing inflation.
• Supply chain issues are impacting all levels of aircraft operations, making it challenging for airlines to meet demand and maintain capacity.
• The fragile recovery of the Chinese tourism market is a significant concern as it was the largest air travel market before the pandemic, contributing to 20% of Asia-Pacific's international traffic. However, it has only accounted for 10% this year.
• Many airlines including Cathay Pacific and Singapore Airlines are developing strategies based on the balance between domestic and international traffic, with focus on maintaining connections between countries such as the US and China despite low direct flight resumption.

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South China Morning Post Reuters CNA