Market leader Asia Pacific ‘could lose its air passenger traffic dominance’

By Luke Barras-hill |

Asia Pacific is set to lose its principal share of global passenger traffic in full-year 2022 to finish at 1.84 million passengers – a 45% decline compared with 2019, forecasts ACI Asia-Pacific.

While countries such as Japan, Hong Kong, South Korea and Chinese Taipei have eased Covid restrictions, continued quarantine requirements in some countries within Emerging and Developed Asia has slowed the region’s overall recovery, according to a statement twinning with the release of the Airport Industry Outlook for Q3.*

Pent-up passenger traffic demand is fuelling the post-Covid recovery, but sizeable headwinds exist such as the ongoing conflict in Ukraine, high fuel prices, rising inflationary pressures, lower economic growth projections and the looming recession, it goes on to say.

Stefano Baronci, Director General, ACI Asia-Pacific said: “Restoring international connectivity will take longer and will be partly dependent on the decision of China to re-connect to the World.

Q3 domestic traffic up 10.5%

“The macro-economic headwinds, less acute in Asia than other western regions, should not hamper a process of growth, subject to continuing to maintain the freedom to travel without restrictions. All the stakeholders engaged in the aviation ecosystem must prepare for the surge in traffic.”

On the other hand, domestic scheduled capacity has recorded a noticeable upswing and is now just 1.5% below 2019 levels.

Third quarter domestic traffic is up by 10.5%, though international capacity remains 51% down on 2019 (up by 8% over Q2 2022).

That Asia Pacific could lose its number on traffic position among the regions in full-year 2022 ‘comes as a significant shock’, says ACI, given it has dominated civil aviation markets since 2011 ahead of Europe and North America. Source: ACI Asia-Pacific.

Load factors for domestic and international passengers remain below pre-pandemic levels across Asia-Pacific and the Middle East sub-regions, continues ACI Asia-Pacific.

South Asia had the strongest load factor recovery in Q2 2022, to 78% versus 84% in Q2 2019.

“The consistent improvement in passenger volumes in the region is a positive indication of a sustained recovery of the industry following prolonged efforts towards rebuilding passenger confidence in air travel,” noted Baronci.

Although airports in the region are enjoying traffic upswings they are still experiencing operating losses, maintains ACI Asia-Pacific.

Total airport revenue in Q2 was around 59% lower compared with the same period in 2019, though a gradual increase is observed versus 2021 and 2021.

Total operating expenditures were 11.5 % lower in Q2 this year against the same period in 2019.

New greenfield airports

Stefano Baronci, Director General, ACI Asia-Pacific.

Since the second quarter of 2021, expenditure levels have remained relatively stable, continues ACI Asia-Pacific, indicating that airport operators are trying to strike a balance between increasing total revenue and maintaining or reducing expenditure.

China’s Zero-Covid strategy that prohibits outbound and inbound travel has overshadowed the region’s overall positive trend.

“The recovery of air transport in Asia Pacific is lagging behind as compared to other regions, mainly due to prolonged administrative restrictions, despite strong economic, social and demographic fundamentals,” added Baronic.

“Altogether, Asia-Pacific and Middle East airports are handling less than half of what they did before. With such dramatic drop in passenger traffic volumes, the economic and financial health of our airports are impaired. Pandemic-induced travel curbs in China and its zero-Covid strategy, continue to hamper recovery in Asia-Pacific.”

ACI Asia-Pacific says global air passenger demand is expected to grow by more than two-fold over the next 20 years – from 9.2 billion passengers in 2019 to about 19 billion in 2040.

The region will in time regain its leadership position in aviation, notes the association, with Asia Pacific and the Middle East alone accounting for 58% of global volumes, increasing at an average rate of +4.5% per annum versus +2.8% for other regions.

To support this, ambitious investment is required to meet demand with plans for almost 300 new greenfield airports, of which 57% are in Asia Pacific alone.

South Asia accounts for 18%, Southeast Asia 17% and Emerging East Asia 12%.

*The Airport Industry Outlook Asia-Pacific and the Middle East Q3 2022 is developed in partnership with Mott MacDonald and offers a quarterly assessment of the airports’ performances.


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