What Avolon’s 2023 Outlook predicts for the Asia-Pacific region
“For every two seats of airline capacity added in the world today, one is in Asia.”
The examination of the Asia-Pacific region’s growth in the report was situated within the broader context of the global outlook. Adopting a global perspective, the paper reassures that the recovery seen in 2022 positioned airlines on the brink of breakeven and an industry profit of $4.7 billion is forecast for 2023. Outlining several of the challenges prohibiting growth in 2022, the paper also looks at inflation, recession, and conflict in the Ukraine. Despite these, the forecast is optimistic for the coming year and sees the Asia-Pacific leading further global recovery.
“The world’s demand to travel is making up for lost time. Aviation has survived a pandemic-driven two thirds fall in demand. It is now ready to thrive.”
The report examined Asia-Pacific’s positioning within the industry, primarily highlighting Asia’s growing role in recovery. Acknowledging that Europe and North America led the 70 per cent recovery in passenger traffic seen in 2022, the paper predicted that indicated Asia will drive the recovery of 2023, catalysed by the reopening of China.
Here are some key takeaways surrounding the Asia-Pacific region:
- Asia-Pacific looks like the strongest region heading into 2023.
- Australia led the way in Asia-Pacific last year in terms of reducing travel restrictions whilst managing Covid exit waves. This was followed by Singapore and the rest of Southeast Asia.
- As the world’s second largest aviation market, China’s reopening will unlock significant demand, driving rapid recovery in the region.
- Asia has taken the growth lead from North America and Europe.
Andy Cronin, CEO Avolon said:
“The rebound in 2022 is set to continue in 2023, with China’s reopening helping to drive global traffic levels to pre-pandemic levels by June. Airlines are enjoying higher fares and load factors, and manufacturers are under pressure to ramp up production quicker. Whilst geopolitical and macroeconomic risks remain, this is a positive environment for lessors as supply constraints drive higher lease rates and increase the value of order books.”
The Asia-Pacific’s recovery will be explored in detail by a range of industry experts at this year’s World Aviation Festival. One Keynote CEO Panel with CEO Qatar Airways, CEO Virgin Austrailia, and CEO Capital A will discuss, ”What is the future of the Asian aviation industry as we come out of the pandemic and how will further digital technology adoption, sustainability, collaboration and new business models help shape the outlook for 2023 and beyond?”
Article by Jess Brownlow