ASIA PACIFIC. Airports International Council (ACI) Asia-Pacific has expressed optimism for the recovery of the aviation sector in its latest report. It reveals some encouraging air travel trends arising from the second quarter of 2022 for the Asia Pacific and Middle East regions.
The ACI Asia-Pacific Industry Outlook for April-June, developed in partnership with Mott MacDonald, provides a snapshot of airport business performance across the regions with analysis of the key industry trends.
Following a turbulent first quarter, the aviation sector recovery in the Asia-Pacific and Middle East regions is now benefiting from a strong pent-up demand to travel, according to the report.
Industry headwinds
Despite signs of improvement, the report notes that the industry still faces strong headwinds. These include geopolitical instability in eastern Europe and its subsequent impact on global macroeconomics, including high inflation, rising energy prices and disruptions in supply chains.
ACI observed that all of these external factors, to a certain extent, continue to negatively impact the supply and demand for air travel.
Seat capacity performance
South Asia and the Middle East have recovered to approximately 85% of Q2 2019 seat capacity in the latest quarter, while Emerging East Asia (China, Mongolia and Democratic People’s Republic of Korea) is at just 15% of Q2 2019 levels.
The low figure from Emerging East Asia is reflective of China adopting a ‘Zero-COVID’ approach and renewed lockdowns, ACI noted, observing that most of East Asian countries are heavily dependent on Chinese passengers.
The Q2 2022 scheduled domestic seat capacity for Asia Pacific and the Middle East was at 89% of the level recorded in the same quarter of pre-pandemic 2019.
The international seat capacity across the regions, however, was still down -59% against pre-pandemic levels in Q2 as travel restrictions, quarantine and testing requirements continue to have an impact, particularly in China and partially in Japan.
Total domestic seat capacity for Asia Pacific and the Middle East is expected to exceed 2019 levels by Q3 2022, with the overall domestic traffic for this year likely to be on par with 2019 levels, the report estimates.
Airport revenues and expenditures
The ACI report also notes that despite improving trends, airport financial margins continue to remain far below pre-pandemic levels and are economically unsustainable. Quarterly revenues remain -60% below 2019, leading to large airport operating losses.
Total operating expenditures have declined in Q1 2022 compared to 2019 and fallen compared to those reported in Q1 2021. ACI said that this demonstrates that airport operators are making continued efforts to limit expenditure.
Airport workforces
Airports in the Middle East and AsiaPacific are carefully handling the risk of deficit of workforce at airports, the ACI report notes. Compared to Europe and other parts of the world, it says airports in these regions have experienced to a lesser extent manpower shortage.
ACI said this is mainly due to two concurrent factors – the long-term vision of several airports to retain their staff despite the challenging time; and to the moderate recovery of traffic compared to other world regions.
Assessing the aviation recovery path ahead, ACI Asia-Pacific Director General Stefano Baronci said: “As a result of a successful vaccination campaign that covers an average of 74% of the population across the region, travel restrictions are being gradually phased out across the region, fuelling strong demand for air travel.
“Though 2022 looks to be a more positive year for the sector, there will be bumps in our road to recovery especially in consideration of the uncertain macroeconomic scenario.
“As part of our efforts to further enhance airports’ role as engines of economic and social progress in a safe and sustainable manner we have urged the regulators to work closely with the industry to enhance manpower and operations to ensure a smooth traveller experience and harmonise as much as possible health protocols.
“ACI Asia-Pacific will continue to work with our members to help the industry build back stronger.”
