While the Asia-Pacific region takes in many diverse airline markets, one thing all the markets have in common is the savage downturn in international flying. International flights to and from the region and within the region remain way down on 2019 levels.
Industry insiders cautious about a meaningful recovery
Before the worldwide travel downturn, Asia-Pacific was the star showgirl of the airline industry. Passenger numbers were growing and expected to account for 40% of the world’s passenger traffic within two decades. Markets like Indonesia, Vietnam, and China were booming. Now capacity across the region is down 86% compared to 2019 levels and no immediate relief is on the horizon
Local industry insiders are being cautious about a meaningful recovery anytime soon. They have a year of COVID experience under their belts. They are also fully conversant with the cultural and political forces in the neighborhood.
Conservative Governments reluctant to take risks
Speaking at an Aviation Week Network online presentation on Tuesday, three Asia-Pacific-based aviation industry insiders struck a careful tone predicting any recovery in the region.
“I think everyone is looking forward to meeting up and going back to normalcy,” said Chin Leong Teo, Chief Commercial Officer (Aero) at Japan’s Fukuoka International Airport. “But generally Asian Governments are a bit more careful and conservative compared to Europe or America.”
“I get the sense there are still a few twists and roundabouts to play out in our COVID recovery,” says Jim Parasgos, Aviation General Manager at Brisbane Airport.
The speakers kept coming back to the conservatism theme. Governments are looking for more than vaccinations to open borders and ease travel restrictions.
“Conservatism will continue to drive cross-border policies,” says Chin Leong Teo. “Vaccine passports will come, but it will likely be combined with a good dose of PCR testing. Few governments in Asia will give up on-arrival PCR testing and many will insist on a pre-departure test.”
“We’ve been in communication with most of the Chinese carriers,” says Hang Zhao, a Senior Consultant at first route development consultancy ASM. “They cannot wait to put their schedules back. The conservative restrictions by governments – that’s kind of a barrier at the moment.”
International travel will recover, but any anticipated short term boom may not occur
Brisbane Airport’s Jim Parashos thinks the future of long-haul travel is secure. But he says it might take a while to bounce back. He asks what is a meaningful recovery.
“We’d love to think there’s going to be a lot of pent-up demand and things will boom,” he says. But based on nearly 18 months of stop-start recovery and a softer than expected travel corridor to New Zealand, Parashos is tempering his growth expectations. “I think if we could be at 40% to 50% of pre-COVID levels sometime in the 2022/23 financial year, we’d be doing pretty well.
“I think the challenge for us all on a global sense, and the big unknown is what will be required from a vaccination or proof of vaccination viewpoint to allow us to ease travel restrictions and to allow governments to open up.”
Chin Leong Teo agrees. He says consistency and mutual recognition of vaccination passports across different platforms are critical. Without it, the Asia-Pacific region is to see a meaningful recovery in international travel. While not raised in the presentation, the lack of engagement by some governments in the region on mutual recognition has received widespread coverage.
However, he argues the fact that these roadblocks are being discussed and solutions sought indicates there is some light on the horizon.
“We are moving in the right direction,” says Chin Leong Teo.
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