Asia Pacific Demand Growth Cools After Post-Pandemic Surge
Asia-Pacific airlines have recovered to pre-pandemic international traffic levels, but growth has slowed amid ongoing challenges. Despite strong passenger demand, supply chain disruptions continue to limit capacity expansion, placing pressure on airline profits.
Industry Recovery and Current Challenges
At the CAPA Airline Leader Summit - Asia in Singapore on October 30, 2025, it was highlighted that while the Asia Pacific airline industry has returned to international capacity levels seen before the pandemic, further growth remains difficult. This year's data show a marked leveling off compared to the previous year’s event in Hong Kong, where capacity had already plateaued.
The slowdown is partly expected as the industry nears full recovery, but additional factors such as supply chain issues, delivery delays, and engine shortages have constrained expansion plans.
Investment and Profitability Trends
Despite these operational limits, airlines in the region remain optimistic about future growth. In 2025 alone, they placed 224 firm aircraft orders, signaling ongoing confidence in market prospects.
Profitability continues in the sector, supporting investment in new fleets; however, profit margins are tightening, suggesting the peak of the current profit cycle has likely passed.
Market-Specific Insights
The report also examines detailed trends in key individual markets including Thailand, Mainland China, and Japan, revealing unique regional dynamics within the broader Asia Pacific context.
This was one of the major points in a state-of-the-industry presentation during the CAPA Airline Leader Summit - Asia event in Singapore on 30-Oct-2025.
“A certain amount of tapering in growth rate could be expected, as the industry approached full recovery. But there are other factors at play, such as the supply chain crisis, delivery delays and engine shortages, that are affecting capacity plans.”
“Despite operational constraints, Asia Pacific airlines have demonstrated confidence in future growth, placing 224 firm aircraft orders in 2025 alone.”
Author’s summary: Asia Pacific airlines have reached pre-pandemic traffic levels, but supply chain challenges are slowing growth and squeezing profits despite continued fleet investments.