Asia Pacific demand growth has cooled after post-pandemic surge

Asia Pacific Demand Growth Slows After Post-Pandemic Surge

Asia-Pacific airlines have recovered to pre-pandemic levels of international traffic, but growth has slowed significantly due to ongoing supply chain challenges. Despite strong passenger demand, profits are facing increasing pressure.

Industry Capacity and Growth Trends

The Asia Pacific airline sector has restored international capacity to what it was before the pandemic, yet expanding beyond this point remains difficult. This insight was highlighted during the CAPA Airline Leader Summit - Asia in Singapore on October 30, 2025. At the previous summit in Hong Kong in November 2024, capacity had already plateaued, and this year the leveling off is even more pronounced.

While some slowdown in growth was expected as the industry reached recovery, additional hurdles like supply chain disruptions, aircraft delivery delays, and engine shortages have further constrained capacity expansion.

Future Outlook and Fleet Investments

Despite these operational challenges, airlines in the region show optimism about future expansion, placing 224 firm aircraft orders in 2025 alone, reflecting ongoing confidence in growth potential.

Generally, the airlines remain profitable, which supports their investments in fleet renewal and expansion. However, profits are increasingly squeezed, suggesting the peak of the current profit cycle may have passed.

Market-Specific Insights

This analysis covers the wider Asia Pacific region, with particular attention to markets such as Thailand, Mainland China, and Japan, highlighting regional variations in recovery and growth dynamics.

"Asia Pacific airlines have demonstrated confidence in future growth, placing 224 firm aircraft orders in 2025 alone."
"Despite operational constraints, Asia Pacific airlines are still generally profitable, supporting their fleet investments."

Author's summary: Asia Pacific airlines have recovered to pre-pandemic traffic levels but face stalled growth and profit pressures due to supply chain issues and operational delays.

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CAPA - Centre for Aviation CAPA - Centre for Aviation — 2025-11-03

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