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 to pre-pandemic levels, yet growth momentum has slowed. This slowdown is largely due to ongoing supply chain challenges, which are putting pressure on profits despite sustained strong demand.

Current Industry Situation

The Asia Pacific airline industry has recovered its international capacity to pre-pandemic levels. However, further progress beyond this benchmark has proven difficult. This point was highlighted during the CAPA Airline Leader Summit - Asia held in Singapore on 30 October 2025.

Trends Compared to Previous Years

At the previous summit in Hong Kong in November 2024, it was already noted that Asia Pacific capacity growth had plateaued. This year, the flattening trend has continued and even intensified, reflecting a natural tapering as the industry nears full recovery.

Factors Affecting Growth

Supply chain disruptions
Delays in aircraft deliveries
Engine shortages

These issues have significantly impacted capacity expansion plans across the region.

Future Outlook and Market Confidence

Despite operational hurdles, Asia Pacific airlines remain optimistic about future growth. In 2025 alone, airlines placed 224 firm orders for new aircraft, signaling confidence in ongoing fleet expansion.

Airlines "are still generally profitable, supporting their fleet investments. However, profits are coming under more pressure, and it is likely that we are past the peak of the latest profit cycle."

Market Analysis Focus

This analysis covers trends across the broader Asia Pacific region, with closer attention to key markets such as Thailand, Mainland China, and Japan.

Author's summary: Asia Pacific aviation has rebounded to pre-pandemic capacity, but supply chain disruptions and increasing profit pressures have cooled growth despite solid demand and ongoing aircraft orders.

CAPA - Centre for Aviation — 2025-11-03