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SINGAPORE: Asia-Pacific airlines are well-positioned for continued growth despite geopolitical tensions, trade frictions and rising operating costs, said the outgoing director general of the Association of Asia Pacific Airlines (AAPA).
The bright outlook is supported by resilient economic conditions and sustained demand for air travel across the region, Mr Subhas Menon told CNA on the sidelines of the Singapore Airshow this week.
Mr Menon pointed to the region’s performance in 2025 as particularly notable “despite all the problems we have in the geopolitical arena”, adding that the region’s air transport growth was double the rate seen elsewhere in the world.
Asia Pacific’s geography, especially, makes air transport a “socio-economic necessity”, he said.
The region spans vast distances, with many countries separated by seas, archipelagos and mountain ranges, limiting the viability of land or sea travel.
“Because the region is neither contiguous nor compact, people really have to jump on a plane to (get) across borders – whether for business or leisure, they need to fly,” Mr Menon added. “That’s why the demand is so strong.”
STRONG AIR TRAVEL DEMAND
Preliminary figures released by AAPA last Thursday (Jan 29) showed airlines in the region carried a combined 390.5 million international passengers last year, a 9.4 per cent increase from 2024.
Passenger demand rose by 11 per cent, reflecting stronger long-haul travel, while intra-regional traffic remained buoyant.
Seat capacity expanded by 10.2 per cent year-on-year, lifting the average international passenger load factor by 0.5 percentage points to a record high of 82.2 per cent.
Mr Menon said economic momentum remains a key driver of travel appetite.
“Gross domestic product (GDP) growth in the Asia-Pacific region is also double the global average. GDP growth and air transport growth usually mirror each other – it’s a symbiotic relationship,” he said.
He added that the expanding middle class across the region, especially in markets such as Southeast Asia and South Asia, is fuelling demand.
India in particular is a major growth opportunity, he said, noting that only about 10 per cent of the world’s most populous nation currently holds passports.
Air cargo traffic also recorded solid growth in 2025, with Asia-Pacific carriers reporting a 5.6 per cent increase, even as airlines operated in a challenging environment marked by new tariffs, AAPA figures showed.
“The region’s carriers demonstrated agility in responding to changes in trade policies and market dynamics, while benefiting from continued growth in e-commerce demand and intermediate goods flows from manufacturing hubs across the region,” Mr Menon said.
Looking ahead, he said the outlook for air travel in 2026 remains positive, underpinned by steady economic growth and further network expansion, though air cargo demand could be weighed down by ongoing trade tensions.
Asian airlines are also expected to continue facing inflationary pressures on operating costs, partly due to lingering supply chain disruptions.
GREEN FUEL TARGET ON TRACK
Sustainability remains a growing focus for the industry.
In 2023, AAPA members pledged to strive for a sustainable aviation fuel (SAF) utilisation target of 5 per cent by 2030, a goal Mr Menon said remains on track as regional governments gradually move towards adopting the fuel.
“The … aspirational target of uplifting 5 per cent of SAF by 2030 … is a milestone,” he noted.
“Very few regional airline associations have committed to that target. Only us and the Airlines for America have adopted a target like that.”
Mr Menon added that the pledge is intended to send a clear demand signal to fuel suppliers and governments.
“Fuel suppliers … is where the holdup is. We want the traditional fuel suppliers to start producing SAF. It is a signal as well to governments to come with supporting policies to enable this to happen,” he said.
Mr Menon will retire in April after six years at the trade association. He will be replaced by industry veteran Wong Hong, who has held senior positions in Singapore Airlines and Delta Air Lines.
The Singapore Airshow, which brings together global leaders in aviation, aerospace and defence to showcase innovation, forge partnerships and shape the future of air travel and security, runs from Feb 3 to 8 at the Changi Exhibition Centre.
