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AAPA Director General Talks Growth, Says China is the Baby Elephant in the Room

Our Bureau - : Nov 9, 2023 - : 8:41 pm

China is the baby elephant that we are waiting to see grow up.

So says the Director General of the Association of Asia Pacific Airlines Subhas Menon, describing the recovery from COVID in the Asia Pacific region.

Speaking to media on the eve of the AAPA’s 67th Assembly of Presidents, Menon said, “I think all of you know that the region’s recovery is still not complete. We have been growing very strongly. We’re still growing at about 170% over 2022 and capacity is being added every month. Capacity growth is slightly weaker than demand growth, at 130%.

“And the good thing is that the elephant [China] that was not in the room is now in the room. But at the moment it’s a baby elephant and we are waiting for it to grow in size.”

Menon said that China will definitely come on track but at the moment it’s still a bit subdued. “We expected more robust growth, but a lot of the other markets are doing very well. If you take China out, the whole industry, is at about 80% of 2019 level. So that’s a very strong recovery.”

According ot Menon, the recovery is not even, with India having recovered to above pre-COVID levels. “So, there are a lot of other markets that are doing very well and China will come onstream soon. At the moment, China is about 30% of 2019 in terms of international traffic year to date.”

China, which opened in May, has increased from 6% to 30% of pre-COVID levels since then. The AAPA expects the recovery to be complete by the early part of 2024, and growth to continue after that, Menon said.

The AAPA Director General sounded a note of warning about supply chain issues. “Supply chain issues are actually slowing down the industry’s ability to ramp up capacity to meet the existing demand, ” he said. “They are affecting the aircraft and engine manufacturers as well as the components and parts suppliers.”

Menon added that half the airline at the AAPA conference confirmed that these issues have not gone away. “They’re not able to re-fleet and they’re not able to do all their maintenance and repairs in time. So that is a big issue and that is probably the main issue that is holding back the ability to ramp up the number of flights.”

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