Asia Pacific to lose its title as the world’s largest travel region
The Asia Pacific spent most of the last decade as the world's largest region for air travel.
From 2012 to the onset of the COVID-19 pandemic, traffic to/from or within the region accounted for better than a third of all passenger journeys globally.
However, with the Asia Pacific recovery lagging, thanks to closed borders, heterogeneous pandemic responses, and caution around inbound tourism, the region is forecast to lose its number one spot in 2022.
- The Asia Pacific region is forecasted to lose its position as the world's largest region for air travel in 2022 due to a sluggish recovery.
- The region is projected to end 2022 with regional traffic still down by approximately 45% compared to pre-pandemic levels.
- Major market closures and slow border reopening, particularly in China and Japan, have negatively impacted regional connectivity.
- Domestic markets within the Asia Pacific have shown stronger recovery compared to international travel.
- Full regional recovery to 2019 levels is not expected until the end of 2023 or early 2024, contingent on border openings and the overall economic and epidemiological situation.
- The future of international travel in the region is highly uncertain, with China's "zero COVID" strategy remaining a significant factor.
Summary
- With recovery lagging, the Asia Pacific region is forecast to lose its number one spot in 2022.
- Sluggish 2022 to end with regional traffic still down by approximately 45%.
- Major market closures and slow border reopening has taken a toll on regional connectivity.
- Domestic markets account for majority of regional recovery.
- China remains the greatest unknown.
Sluggish 2022 to end with regional traffic still down by 45%
ACI Asia-Pacific's latest traffic outlook projects that Asia Pacific regional airports will handle approximately 1.84 billion passengers in 2022, which is growth of 22% year-on-year.
This means that regional passengers will still be down by 45% when compared to levels before the pandemic. In 2019, 3.38 billion passengers passed through Asia Pacific airports - approximately 37% of global air travellers.
Globally, airport passenger numbers are forecast to reach 6.8 billion in 2022, which represents growth of 47% year-on-year. In most regions passenger numbers are expected to return to 70-80% of pre-COVID levels.
As a result, the Asia Pacific's share of global traffic is projected to fall to 27% for 2022.
Europe - where traffic volumes have recovered to approximately 85% of pre-pandemic levels, even with the downturn in Russia - is projected to end 2022 as the world's largest travel region, whereas North America and the Asia Pacific are expected to end the year broadly even.
Major market closures and slow border reopening takes toll on regional connectivity
According to ACI Asia-Pacific, the slow recovery has been caused by China's ongoing border restrictions, and by Japan's slowness in relaxing its inbound travel restrictions on tourists.
These are the region's two largest travel markets, accounting for a little more than 52% of total regional capacity and 42% of regional international seats in 2019, so what happens there has an outsized impact on the rest of the region.
China and Japan: share of Asia Pacific regional seat capacity, 2012-2022*
Before COVID-19 China was the world's largest outbound travel market, with an estimated 155 million outbound travellers - better than half of them being air passengers. According to the Chinese Tourism Academy, nearly 90% of Chinese outbound travellers visited destinations in the Asia Pacific before the start of the pandemic.
However, the country's 'zero COVID' approach has largely kept it closed off to international travel. China maintained scheduled air travel with 54 countries for the breadth of the pandemic, but capacity was kept to a minimum.
A combination of travel restrictions, quarantines, visa changes and 'circuit breaker' measures - which forced airlines with COVID-19-positive passengers to temporarily halt operations - has kept international capacity to/from China at under 10% of typical volumes.
International seat capacity to/from China: 2021 to 2022 (vs 2019)
Japan has been marginally more open, but it too has maintained travel restrictions longer than most other markets.
The country announced at the end of Aug-2022 that it was finally raising its cap on inbound tourists from 20,000 to 50,000 per day, as well as ending requirements around PCR testing and requiring foreign arrivals to have an itinerary booked through a travel agency.
The result is that international capacity in the two most important Asia Pacific travel markets has plummeted.
China's international share of Asia Pacific seats fell from 26.2% in 2019 to an estimated 5% for 2022 (including forward projections for the rest of the year), and Japan's share has fallen from 16.6% to 10%.
China and Japan: international scheduled seats per week, 2021 to 2022 year to date
Capacity growth in other markets has not been able to compensate.
A few of the Asia Pacific's other large international travel markets - notably India - are approaching full recovery, but most remain at 50% or more below 2019 levels.
Top 10 Asia Pacific countries by scheduled international seats (week to 29-Aug-2022)
|
Rank |
Country |
International seats |
Percentage change from 2021 |
Percentage change from 2019 |
|
1 |
1,351,860 |
+223.3% |
-11.4% |
|
|
2 |
951,169 |
+308.9% |
-41.2% |
|
|
3 |
762,134 |
+493.3% |
-64.3% |
|
|
4 |
621,898 |
+247.8% |
-71.5% |
|
|
5 |
610,233 |
+196.6% |
-76.4% |
|
|
6 |
577,841 |
+582.6% |
-56.3% |
|
|
7 |
575,929 |
+466.5% |
-42.7% |
|
|
8 |
465,983 |
+461.4% |
-49.8% |
|
|
9 |
448,298 |
+1092.9% |
-52.4% |
|
|
10 |
400,629 |
+252.4% |
-47.7% |
Domestic markets account for majority of regional recovery
The Asia Pacific is home to several of the world's largest domestic air travel markets.
As COVID-19 transmissions have eased through the year, government restrictions on domestic travel have also been lifted, meaning that domestic travel has improved through the year.
Top 10 Asia Pacific countries by scheduled domestic seats (week to 29-Aug-2022)
|
Rank |
Country |
Domestic seats |
Percentage change vs 2021 |
Percentage change vs 2019 |
|
1 |
13,791,020 |
-2.7% |
-5.4% |
|
|
2 |
3,044,869 |
13.6% |
-4.9% |
|
|
3 |
2,712,980 |
46.7% |
-4.1% |
|
|
4 |
1,936,635 |
37.6% |
-20.9% |
|
|
5 |
1,315,401 |
225.2% |
-11.5% |
|
|
6 |
1,217,379 |
505.0% |
46.4% |
|
|
7 |
674,151 |
265.1% |
-1.2% |
|
|
8 |
652,656 |
211.0% |
-25.4% |
|
|
9 |
582,082 |
-18.2% |
-0.2% |
|
|
10 |
536,948 |
324.9% |
-26.2% |
Most major markets are now at more than 90% of pre-COVID-19 capacity levels, although a few remain more volatile than others.
China's 'zero COVID' policy remains an issue here though, with lockdowns in response to relatively small levels of COVID-19 transmissions sending domestic capacity down by as much as 30% week-to-week.
Full regional recovery is not anticipated until the end of 2023, or early 2024
Full regional recovery to 2019 levels is not anticipated until the end of 2023 or early 2024, and even then recovery is dependent on countries opening their borders and ending lingering travel restrictions, as well as the wider economic and epidemiological situations.
There also needs to be continuing progress with vaccinations, work on harmonisation of international travel rules and above all, a reaffirmation of political commitments towards openness and freedom of movement.
China remains the greatest unknown, and the extent to which the county's 'zero-COVID' strategy is retained or relaxed will determine, to a large extent, how rapidly international travel in the region recovers in 2023.
There has been no official indication that the country is willing to give up on its approach, although restrictions on international travel are slowly easing.
Since Jul-2022 rules around visas, quarantines, testing, student arrivals and the 'circuit breaker' capacity limitations have all been relaxed, and authorities have commented about pursuing an "orderly" return to international travel.
In another potentially positive sign for international travel, Chinese President Xi Jinping visited Kazakhstan on 15-Sep-2022, which was his first international trip since Jan-2022.
Above all, the 'zero COVID' strategy remains a political question. No decision is expected to be forthcoming until after the upcoming Chinese Communist Party national conference - which will stretch from 16-Oct-2022 to 11-Nov-2022.
Until then, and some firm commitment is made either way, the outlook for regional travel will remain highly uncertain.
CAPA Asia Aviation Summit returns in Nov-2022 - three events under one roof
After more than two years since the last regional Asia summit, the CAPA Asia Aviation Summit is expected to attract hundreds of senior aviation and transport executives, airports, political leaders, industry experts and suppliers to Singapore.
The two-day summit will tap into the post-COVID-19 aviation industry across Asia to address the latest developments, challenges and strategic issues, plus include a new injection of stimulating discussion on the evolving LCC market.
The CAPA Asia Aviation Summit is part of CAPA's regional summit series and is highly regarded as an industry benchmark event across Asia, offering thought leadership, valuable networking opportunities, and in-depth insight on the issues and trends that shape the local and global airline industry.
The two-day event will also include the CTC Corporate Travel Summit & Sustainability Expo, as well as the coveted CAPA Asia Pacific Aviation Sustainability Awards for Excellence Gala Dinner, where airlines will be recognised for their strategic excellence and leadership throughout the COVID-19 pandemic and for their sustainability credentials.