Page 35 - SINGAPORE AIRSHOW 2024 - INSIGHT

Q How is the recovery of airline industry in Asia?

Subhas Menon , People talk about recovery, and it’s not considered
a recovery unless you get to 2019 levels. I think we
Director General have to re-examine this, because 2019 was not the
glory days of aviation or anything like that. As far
as I’m concerned, I think the industry has actually
of the Association of already recovered. If you look at air connectivity in
terms of unique city pairs. The industry as a whole
Asia Pacific Airlines has already touched 21,900 city pairs. Whereas in
2019 it was only 21,700 over city pairs.

All these numbers don’t really mean a lot. What
is important is that the flights are full, airlines are
reporting operating profits again, and airports are
congested, and governments are busy turning out
regulations after regulations, not that many of them
are very useful for passengers or airlines.

I think we should take a second look at this. Why
should it be 2019 levels before we call it a full
recovery? And Asia-Pacific is, of course, slightly
laggard. That’s because borders in the region were
only reopened six months after the rest of the world.
Asia-Pacific will take a bit longer, and the reason is
of course, China. China’s recovery has been quite
muted. Although Chinese borders were actually
effectively only fully opened in May, we still think that
China is actually a bit slow in recovering to the levels
that we expected of China.

This year the recovery also depends how the
world navigates policy uncertainties, especially
given some of the major elections that are afoot.
I think, these will have a bearing on how the
industry is able to hold onto its recovery and
profitability, particularly the China-US rela-
tionship, it is very important for Asia-Pacific.
The world is not at a very happy place at the
moment.

Q How big is China?

China accounts for about 20% of the Asia-
Pacific international traffic, and right now
they’re at about 10%. Domestically, they
have already fully recovered, but interna-
tional, they’re a bit slow. And if you really
look at it, there are fundamental reasons for
this, which could happen in any year. It’s not
only because of COVID, it’s inflation, as well
as deflation of the Chinese currency, youth
unemployment, in fact, unemployment as a
whole, but youth unemployment particularly
is concerning, and the property market, which
was really the source of income and affluence

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