Southeast Asia aviation 2018 outlook: more rapid growth, low profit margins and intense competition
Southeast Asia is a region of rapid growth and huge potential. Passenger traffic in Southeast Asia grew by approximately 10% in 2017, when at least half of the region’s 10 countries recorded double-digit growth.
However, it is also a region of intensifying competition, and several markets suffer from overcapacity. Yields have been steadily declining for the past few years, resulting in very low profit margins, despite low fuel prices and relatively high load factors.
Yields are now showing some signs of stabilisation, but are not likely to increase sufficiently to offset higher fuel prices. In 2018 it will be another year of good growth and meagre profits for the Southeast Asian airline sector.
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