Asia Pacific Demand Growth Slows After Pandemic Surge
Asia-Pacific airlines have restored international traffic to pre-pandemic levels, but expansion beyond that has stalled due to supply chain disruptions. Despite continued strong demand, profitability is under pressure.
Current Industry Status
The Asia Pacific airline sector has regained pre-pandemic international capacity levels. However, growth momentum has largely plateaued, a fact highlighted during the CAPA Airline Leader Summit - Asia on 30 October 2025 in Singapore. A similar presentation at the November 2024 event in Hong Kong noted that capacity growth had already levelled off, and this year the trend has flattened even further.
Factors Impacting Growth
Some slowdown in growth was expected as the industry neared full recovery. Yet, ongoing supply chain challenges, delivery delays, and engine shortages continue to impact fleet expansion plans and limit capacity increases.
Airline Confidence and Financial Health
- Airlines show optimism about future growth, placing 224 firm aircraft orders in 2025 alone.
- Generally, airlines remain profitable, which supports fleet investment efforts.
- Profit margins are tightening, suggesting the peak of the current profit cycle has likely passed.
Market Focus and Analysis
This analysis covers the broader Asia Pacific region with particular attention to specific markets such as Thailand, Mainland China, and Japan.
"Despite operational constraints, Asia Pacific airlines have demonstrated confidence in future growth, placing 224 firm aircraft orders in 2025 alone."
Author's summary: Asia Pacific airlines have rebounded to pre-pandemic international traffic but face stalled growth due to supply chain issues and declining profits, though investment in aircraft remains strong.