Airline strengths and threats in 2024

February 1st 2024

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Asia-Pacific airlines posted a 126.1% rise in full-year international traffic in 2023 compared with 2022, the strongest year-on-year increase among airline regions worldwide, the International Air Transport Association (IATA) reported earlier this month. Read More » The trajectory, IATA said, tees up airlines for a return to normal growth patterns in 2024. It is a view shared by the Association of Asia Pacific Airlines (AAPA).

The AAPA said the region’s carriers recorded a 161.0% increase in international passengers carried last year, to 278.5 million air travellers. Passengers transported averaged 72% of pre-pandemic 2019 traffic, up 28% over 2022. The Asia-Pacific still lags all regions worldwide in reaching full recovery, but it is well on the path to achieving normality this year, it said.

Nevertheless, as our report card on the region’s recovery in clearly shows, the road ahead could be rocky. A travel hungry public flocked back to the skies in the wake of the pandemic, but there is no guarantee the surge will last. Economic woes, both global and regional, especially the rising cost of living could dampen demand.

Additionally, geopolitical unrest in the Middle East, the Russia-Ukraine war and tense relationships between Western nations and China add up to a troubled world. As well, airlines continue to be dogged by supply chain issues and delayed aircraft deliveries, problems expected to persist into 2025.

Some airlines are doing well financially, but for most carriers, decent profitability is elusive, resulting in wafer thin margins unacceptable in any other industry. Air cargo markets are improving, but they are weighed down by multiple headwinds, including inflation, a strong U.S. dollar and government policies dampening trade activity and household spending power.

IATA director general, Willie Walsh, said restoration of connectivity is powering the global economy as people travel to do business, further their education, take hard earned vacations and much more.

“But to maximize the benefits of air travel in the post-pandemic world, governments need to take a strategic approach. Completing the recovery must not be an excuse for governments to forget the critical role of aviation in increasing the prosperity and well-being of people and businesses the world over.”

Walsh is right. However, for airlines, including Indo-Asia-Pacific carriers, it will be yet another year of many unknowns.

TOM BALLANTYNE
Associate editor and chief correspondent
Orient Aviation Media Group