Outlook 2025: Asia Pacific – familiar challenges persist

The Asia Pacific airline industry is set to continue its international capacity growth in 2025 and finally move past the pre-pandemic benchmark, although the growth rate will be hindered by aircraft availability issues.

Airlines in this region are collectively already close to 2019 capacity levels in the international market; so it is likely that they will exceed that mark early in the new year.

Aside from a few key international markets, the factors inhibiting capacity growth are no longer demand-related. Airlines want to grow faster, but are frustrated by engine issues, delivery delays and supply chain bottlenecks.

Aircraft orders by Asia Pacific airlines have soared over the past few years as airlines look to rebuild their fleets. This trend will continue in 2025, with some key deals looming, although possibly to a lesser extent than in 2023 and 2024.

Constrained capacity will help to keep yields and revenue relatively high, although they may moderate somewhat in 2025.

Collective profits in the region are expected to rise slightly, although financial fortunes will be mixed.

Factors such as elevated costs and geopolitical tensions will continue to put financial pressure on Asia Pacific airlines.