Analysis Reports

While the pace of aircraft orders from Asia Pacific airlines has eased after two years of strong activity, there are still potential orders on the radar that could boost the region's total this year 2025.

There have been several notable aircraft deals already in 2025, and negotiations are under way for other major orders.

Although this year's activity is down somewhat from the wave of orders in 2023 and 2024, it still represents a continued healthy appetite for fleet investment.

There is a range of factors motivating Asia Pacific airlines to pursue aircraft orders. Some are restarting investment that was put on hold while they regained financial health.

With medium term delivery slots becoming scarcer, airlines are aware they need to lock in orders before delivery dates are pushed out even further.

Politics plays a part in a few cases, as placing large orders with Boeing will help some countries reduce trade imbalances with the US.

Other airlines are content to wait until the market cools a little, and shifts the advantage back towards the buyer.

But in general, it has been shopping season for Asia Pacific airlines.

The Mexican low-cost airline Volaris marks its 20th year of operations in 2026, and as that milestone approaches the airline is broadening its reach beyond the 'visiting friends and relatives' (VFR) traffic segment that's been Volaris' core for much of its existence.

The widening of its passenger reach and product offerings is a natural progression for a maturing company like Volaris.

However, the airline stresses that its ultra low-cost DNA remains intact as its offerings evolve.

This regular CAPA - Centre for Aviation report provides a summary of major developments in the aircraft interiors sector, supported by data from the CAPA Aircraft, Interiors Database and CAPA News.

This edition covers Sep-2025 and Oct-2025 and features:

New entrants to the premium economy market;

Availability of premium economy by region;

Airlines' continued focus on premium economy;

+ Latest global interior updates.

A number of European airline chief executives - both legacy and low cost - have recently turned to the media to express disgruntlement with aviation's treatment by Europe's leaders and regulators.

Carsten Spohr and Benjamin Smith - respectively, the heads of Lufthansa Group and Air France-KLM - gave an unprecedented joint interview to Frankfurter Allgemeine Zeitung and Les Echos to call for a "level playing field". They compared slow growth by Europe's leading network airlines with the rapid expansion of super-connectors based in the Gulf and Türkiye.

Wizz Air CEO József Váradi told the Financial Times that Europe's policymakers were ignoring air travel's potential to contribute to growth, putting the continent's airlines at a disadvantage to rivals in the Gulf.

Hardly a week goes by without Ryanair boss Michael O'Leary criticising EU and national leaders over some aspect of aviation regulations, including bag charges, aviation taxes, green fuel costs and air traffic control.

While the Asia Pacific airline industry has regained pre-pandemic international capacity levels, progress beyond this point has proven elusive.

This was one of the major points in a state-of-the-industry presentation during the CAPA Airline Leader Summit - Asia event in Singapore on 30-Oct-2025.

At last year's event in Hong Kong in Nov-2024, a similar presentation noted that Asia Pacific capacity had levelled off. Well, this year it has flattened even more.

A certain amount of tapering in growth rate could be expected, as the industry approached full recovery.

But there are other factors at play, such as the supply chain crisis, delivery delays and engine shortages, that are affecting capacity plans.

Despite operational constraints, Asia Pacific airlines have demonstrated confidence in future growth, placing 224 firm aircraft orders in 2025 alone.

The good news is that 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.

This analysis looks at trends in the broader Asia Pacific region, but also takes a closer view of some specific markets such as Thailand, Mainland China and Japan.

Across the world many airports aspire to be international when they not and some not be international when they are.

The Bangladeshi government has coveted international status for Cox's Bazar airport on the Bay of Bengal for 13 years. The city-region has the longest sandy beach on Earth by a country mile and a domestic tourism base to go with it.

But there are few international visitors, which the government craves. The fact you can't fly there internationally and have to travel usually via Dhaka Airport doesn't help.

So since 2018 and especially so in 2025 the government and airport authority have worked to bring that status and early in Oct-2025 the airport was declared 'international'.

The trouble is that no airline seems to want to fly there internationally. Even flag carrier Biman Bangladesh which wanted to fly from Cox's Bazar to Kolkata in India has withdrawn its interest since the government did a complete volte face and de-internationalised the airport less than a fortnight later.

Something has gone seriously wrong here and it seems the necessary groundwork wasn't even started, never mind completed.

There is still hope. This is a vacation destination ripe for exploitation; it just needs a professional approach.

This report examines the reasons for this turn of events and suggests some possible remedies, including the assistance of a certain secret agent that covets assignments in attractive beach destinations.

Loganair expects to be one of the first passenger airlines in the world to deploy new propulsion technology for zero emissions flights by the early 2030s, or sooner. It plans to use hydrogen technology developed by ZeroAvia.

Loganair aims to retrofit its existing DHC-6-400 Twin Otter turboprops, which famously land on the beach on the island of Barra, with a ZeroAvia hydrogen-electric power unit.

The aims of the UK's largest regional airline complement the technology and development timeline of ZeroAvia, among the leaders in applying hydrogen fuel cell technology to power aviation. Moreover, ZeroAvia plans to build a manufacturing facility close to Loganair's Glasgow Airport headquarters.

The Asia Pacific aviation sector finds itself navigating a complex landscape of recovery dynamics, structural shifts, and emerging challenges that collectively signal a fundamental transformation in the region's aviation ecosystem.

The current trajectory reveals a market that has moved beyond simple pandemic recovery metrics toward a more nuanced phase of strategic recalibration and sustainable growth planning.

Those were the key observations delivered by CAPA - Centre for Aviation in its Asia Pacific region State of the Industry address at the CAPA Airline Leader Summit - Asia conference in Singapore on 30-Oct-2025.

The race has been on to locate the site for, and build, a regional hub airport for the CIS countries, those that escaped the clutches of the Soviet Union in the 1990s but initially remained tied to Russia's command economy model.

Latterly, buoyed by oil, gas and mineral wealth (albeit not on the scale people might imagine), some of these countries - the 'Stans' as they are colloquially known - have acquired strong economies and GDP growth, and are increasingly attracting foreign inward investment.

And their location on the map is as central as it gets.

Some of their national airlines have grown rapidly, and private sector investors have started to look more closely at the prospects for the airports.

It has become clear that a hub airport for the 100 million plus people in the region outside Russia would make sense And the first mover is Tashkent, the capital of Uzbekistan, where a PPP will see the government work with a consortium of Korea's Incheon International Airport Corporation (IIAC), Japan's Sojitz Corporation and Invest Vision, a Saudi Arabian developer and investor across public and private investors, to build a new airport.

On the surface, it's a dream team, and already IIAC is talking about the "second and third Incheon airports", referring to Tashkent and the Urgench airport. The airport serves a religious tourism area, which is a tad optimistic, even though there are positive factors in place such as a fast-growing airline and comprehensive network at the existing airport.

But it isn't a region given over to one country taking precedence over another, which is what can happen when a hub airport is designated in these circumstances.

European airports of all shapes and sizes, and particularly the 'low-cost' ones, once topped the wish list of not only the traditional financial investment fraternity, but also the start-ups from the surface transport, construction and real estate sectors, all of whom thought they could do a better job than civil servants.

Most of the latter have long since departed for other pastures.

Those days are firmly in the past, and the only activity of any importance going on currently is usually on-sales of freehold ownership and lease concessions, together with the occasional public-private partnership, and there isn't a great deal of action in total; the entrepreneurs have taken their money elsewhere, or just given up altogether.

There were two glimmers of light in 2024 and during 2025, firstly in the form of the return to the fray of Australia's Macquarie Group and its various funds. Macquarie having previously abandoned UK and European airport investments and now returning to some of those UK ones (while admittedly still offloading others).

Macquarie's soon to be 75% ownership of London City Airport is at a level not seen there for two decades.

Secondly is the commitment of the French private equity firm Ardian, spun out of the giant Axa, which is now the majority shareholder by some way at London Heathrow Airport, with numerous important airports privately owned or concessioned in Italy, and now close to acquiring partially the SAVE Group airports, again in Italy and in Belgium, within a consortium.

That acquisition would give Ardian 14 airports in total, and put it broadly in the same class as the all-powerful VINCI Airports - at least, in Europe.

While it is still too early to declare that European airports are back in favour in the investment community, this does demonstrate that they are at least back in the consciousness, their prospects being encouraged by a relatively new financier to the business (from 2011, as Axa Private Equity) and one that is as old as the hills.