Asia Pacific Demand Growth Has Cooled After Post-Pandemic Surge
Asia-Pacific airlines have now regained international capacity comparable to pre-pandemic levels, yet growth momentum has slowed following an initial post-pandemic surge. Persistent supply chain challenges and delays in aircraft deliveries have started to weigh on profit margins, despite enduring demand for air travel.
Industry Recovery and Plateau
During the CAPA Airline Leader Summit - Asia held in Singapore on October 30, 2025, industry leaders acknowledged that recovery progress had stalled. Although airlines in the region reached pre-pandemic capacity, expansion beyond that has become increasingly difficult.
“Progress beyond this point has proven elusive,” stated a key presentation at the summit, highlighting that the market’s earlier momentum has now flattened out.
Comparative Industry Context
At a similar event in Hong Kong in November 2024, experts already noted signs of capacity stabilization. One year later, the trend has continued, signaling a clear slowdown as the market approaches its recovery ceiling.
Key Challenges and Constraints
- Ongoing supply chain disruptions impacting aircraft production and parts availability.
- Engine shortages causing delivery delays and operational inefficiencies.
- Rising cost pressures reducing profit margins even amid consistent demand.
Despite these setbacks, Asia-Pacific carriers demonstrate confidence in long-term growth by placing 224 confirmed aircraft orders in 2025 alone. These investments reflect optimism but also test financial resilience in a tightening profit environment.
Market Spotlight: Regional Insights
The CAPA analysis also provides focused insights into leading aviation markets such as Thailand, Mainland China, and Japan. Developments in these markets offer indicators of broader regional trends in recovery, capacity management, and strategic expansion.
While the overall profitability of Asia-Pacific airlines remains intact, experts suggest the sector may already be past the peak of its latest profit cycle.
Author’s Summary
Asia-Pacific airlines have reached pre-pandemic strength but now face a plateau, as supply bottlenecks, engine delays, and shrinking margins reshape the profit outlook in 2025.