Domestic airline networks to lead post-COVID-19 AsiaPac rebound

The COVID-19 crisis shows that while it is good to have a globally diverse network, a strong domestic operation is a major advantage for airlines when a shock disrupts international traffic flows.

Industry logic holds that a broad spread of international routes lessens an airline's reliance on any single market - including its home patch. So if a downturn occurs in one country or region, airlines can divert resources to areas that are not affected. Many successful airlines have built their models around this concept.

And that approach makes sense - until something like a pandemic appears out of nowhere to trigger global border closures. Then domestic networks become a godsend, and the giant airline companies that depend on international connecting traffic look more exposed.

While international travel was the first to be hit, COVID-19 has caught up with many domestic networks as governments are increasingly shutting down internal movement. But domestic networks can be expected to return sooner, and demand should also rebound more quickly.

The Asia-Pacific region illustrates the benefits and limitations of different approaches. Although having domestic routes will not guarantee success, they should provide a valuable foundation for many airlines' eventual recoveries.