Asia Pacific demand growth has cooled after post-pandemic surge

Asia Pacific Demand Growth Slows After Post-Pandemic Surge

Asia-Pacific airlines have restored international traffic levels to those seen before the pandemic, but further growth has stalled due to ongoing supply chain challenges. Despite strong demand, profits are increasingly pressured.

Industry Capacity and Growth Trends

The Asia Pacific airline sector has returned to pre-pandemic international capacity, but advancing beyond this milestone remains difficult. This key insight was shared during the CAPA Airline Leader Summit - Asia in Singapore on October 30, 2025. At the previous summit in Hong Kong in November 2024, the region's capacity was already reported to have plateaued. This year, growth has flattened even further.

While some deceleration in the growth rate was anticipated as the industry neared full recovery, additional complications have emerged. Supply chain disruptions, delivery delays, and shortages of engines are significantly impacting fleet expansion plans.

Future Outlook and Fleet Investments

In spite of operational constraints, Asia Pacific airlines remain optimistic about future expansion. In 2025 alone, carriers placed 224 firm aircraft orders, signaling confidence in long-term growth.

Airlines are still generally profitable, which underpins their fleet investments. However, profit margins are tightening, suggesting the peak of the current profit cycle may have passed.

Regional Market Insights

This analysis covers broader trends across the Asia Pacific region and offers focused observations on key markets including Thailand, Mainland China, and Japan.

The full CAPA Analysis Report contains 1,411 words.

Author's summary: Asia Pacific airlines have returned to pre-pandemic capacity but face growth constraints from supply chain issues and rising profit pressures despite strong demand.

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

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