The annual Routes Asia airline-airport network planning event showed a region resuming rapid growth – although Chinese traffic recovery is dragging, and aircraft availability is hindering expansion rates for some. Mark Pilling reports from Langkawi, Malaysia
The overriding message from the 20th edition of Routes Asia, held on the beautiful tropical island of Langkawi off the coast of northern Malaysia, is that network development is resuming with a vengeance in the Asia-Pacific region.
As evidenced by the largest ever exhibition hall at the Informa-delivered event, which attracted over 110 airlines, airports from across the region are scrapping hard to grab back former routes and develop new ones amid fresh traffic demand, the lifting of travel restrictions, airport investment and the inevitable incentive programmes.
The main barriers to the traffic flood gates opening more fully are the sluggish revival of the important Chinese market and a lack of aircraft, either because of late deliveries from the manufacturers or with the grounding of Pratt & Whitney GTF-powered Airbus A320neos.
Hosted by Malaysia Airports and Tourism Malaysia, Routes Asia 2024 was the first of these events since the pandemic where all 10 major Chinese airlines took part, said Steven Small, Director of Routes.
It was clear from the many deserted restaurants and hotels in Langkawi why Malaysia wanted to host Routes Asia and put the island back on the map. As one delegate described, without tourism Langkawi is “just a fishing village”, and its livelihood was decimated by the pandemic.
Malaysia has recovered reasonably well since Covid, with passenger numbers across the country’s airport network totalling 119.5 million in 2023 – the first time since 2019 that the figure surpassed the 100 million mark.
The Group’s international and domestic passenger numbers reached 86.2% and 83.2% of 2019 levels with 58.2 million and 61.3 million respectively.
This recovery rate is expected to continue with 17 more airlines identified by the Malaysia Airports team for potential services to the country, said Mohamed Rastam Shahrom, Acting Group CEO.
Facing a tough challenge from neighbours Thailand and Singapore to attract visitors, Malaysia is doing all it can to boost its story, including a bid to host the World Routes event once again, explained Loke Siew Fook, Minister of Transport in Malaysia.
He expected his country to achieve full recovery in air travel in 2024 and welcomed the green light to upgrade Kuala Lumpur International Airport and plans to build a new international airport in Penang.
In addition to traffic growth among south-east Asian destinations the countries mentioned most frequently for extra service in the meetings held at Routes Asia in Langkawi were China and India.
Several countries have relaxed visa requirements for Chinese and Indian nationals to assist with this expansion. “We have implemented a visa-free policy for up to 30 days since December 2023 and seen a lot of improvement in terms of arrivals,” said Minister Loke.
Traffic recovers
Looking at the market as a whole: “Asian aviation is heading in the right direction, it is just taking the scenic route to get there,” said Subhas Menon, Director General of the Association of Asia Pacific Airlines.
With its dependence on tourism, plus the performance of the Chinese market, Asia-Pacific is the only region that did not surpass 2019 traffic levels in 2023, said Menon. However, this is expected to happen in 2024, he added.
And the region is expected to accelerate faster than most others. “This region was slow to restart but will soon regain momentum,” said Stefano Baronci, Director General of Airport Council International (ACI), Asia-Pacific and Middle East.
ACI’s own forecast shows that traveller numbers will double to 8 billion in Asia-Pacific by 2042, he said. This is good news but will result in a “big infrastructure challenge” for the region’s airports; some are already facing congestion, noted Baronci.
He added that regulatory change has been both a success and a failure in the region. In the ASEAN (Association of Southeast Asia Nations) countries, liberalisation has helped drive traffic growth, but some nations, such as Australia, continue to restrict the free entry of foreign carriers, said Baronci.
“The fundamental message is that if you want to keep a competitive advantage and if your market is mature enough, it is important to further open the market,” he said. Baronci added that liberalisation should “not stop with visa facilitation”.
Airline stories
Speaking on a panel about connectivity restoration, Matthew Choi, General Manager Corporate Planning at HK Express, explained that his carrier is at 140% of pre-Covid capacity as it takes advantage of strong demand from Hong Kong and the Asian network it serves.
“We are very bullish on overall demand although our capacity to China is still lagging,” he said, of the low-cost carrier owned by Cathay Pacific. In 2023, as load factors hit 98%, the carrier was constrained by crew availability issues.
“In 2024 we are transitioning to a point where we are more constrained by aircraft availability,” said Choi. Although HK Express’s fleet of Airbus A320s will grow from 33 to 40 aircraft by year-end, four of its Pratt & Whitney GTF-powered A320s were grounded at the time of Routes Asia and this number is expected to rise this year.
Philippine budget carrier Cebu Pacific is similarly affected by A320neo issues, with 15 on the ground when Routes Asia took place and up to 20 to be out of service by the end of the year, said Rohan Kapoor, Group Director Operations Contracts and Asset Management.
Despite challenges with aircraft availability, Cebu managed to grow its capacity by 6% in 2023, led by the expansion of its A330neo and ATR74 turboprop fleets, said Kapoor.
“We really want to grow in the Middle East, but we are handicapped by the engine issue,” he noted. The airline has been forced to pause its growth in the region, with Saudi Arabian routes “being explored in detail”.
Cebu has redeployed some of its A330s on domestic routes, as well as on services to Japan and Bangkok, to deal with a lack of aircraft.
AirAsia Group, which is operating a fleet of 170 aircraft across its various country units, expects it will only take delivery of half of the 16 A321s planned to arrive this year, said Paul Carrol, Chief Revenue and Network Officer. “Long-term planning has gone out of window,” he said, because of uncertainties about deliveries and delays in getting aircraft into and out of maintenance.
“Our plans do stretch out 24 to 48 months but at the moment our activity is in a three-to-six-month window – we just cannot plan,” noted Carrol.
India is a “real bright spot” for AirAsia, he said, with five new destinations being launched in the second half of this year alone.
Award winners
One of the highlights of Routes Asia is the annual awards ceremony. Organisations from the Philippines and Australia ran out as big winners.
The Best Airline gong went to Cebu Pacific, while Clark International Airport was voted top gateway in the Under 5 Million Passengers category.
In the 5-20 Million Passengers category, Australia’s Perth was the victor, retaining the title it was awarded in 2023. Another Australian gateway, Melbourne Airport won in the Over 20 Million Passengers category.
Japan National Tourism Organisation (JNTO) was crowned as the overall winner at the Routes Asia 2024 Awards, as well as triumphing in the Destination category.
As the event closed, the host baton was handed over by Malaysia Airports to Perth Airport and co-host Tourism Western Australia. The next Routes Asia will take place on 25-27 March 2025.
