OAG says that it analysed 11 principal markets including China, Taiwan, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam
Aviation data tracking and analysis firm OAG says that the recovery in international air capacity in Asia has largely been a mixed bag due to the varying timelines for reopening across the region.
A report by OAG says that it analysed 11 principal markets including China, Taiwan, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam.
OAG says that compared to 2019 levels, India is by far the most recovered market with international seat capacity in August 2023 exceeding 2019 levels by 4 pc. Vietnam is not far off, just 8 pc below the pre-pandemic levels, Singapore 11 pc, Indonesia 12 pc and the Philippines 17 pc below August 2019.
OAG says that looking at India, it is interesting to see where recovery has or hasn’t taken place on its top international destinations by seat capacity. OAG says that six of India’s top 10 international country markets in August 2023 have now exceeded pre-pandemic capacities. While the United Kingdom has seen a jump of 53 pc in seat capacity from India, Saudi Arabia has also recorded 33 pc growth over August 2019, while Singapore has seen 11 pc growth. The United Arab Emirates has grown by 8 pc, followed by Qatar at 6 pc and Kuwait at 5 pc.
Middle East destinations gain most from India
OAG says that there is a distinct trend towards Middle Eastern routes from India outperforming August 2019 levels, while Southeast Asian routes, with the exception of Singapore, seem to have lost their shine. Thailand, which in August 2019 was ranked the second largest for international seat capacity from India, fell to fifth place, a fall of 29 pc below August 2019 capacity, whilst Malaysia, previously in fourth place, fell to eighth place, with a 36 pc decline in pre-pandemic capacity.
This stronger recovery for Middle Eastern routes isn’t unique to India, says OAG. In Indonesia, some of the highest recovering routes are Saudi Arabia, that is up 79 pc, the UAE up 10 pc and Qatar up 2 pc. OAG says it has assumed that much of the growth in Indonesia-Saudi Arabia routes is being driven by its Muslim population embarking on Umrah pilgrimages. In May 2023 Saudi Arabia launched its e-visa application for Hajj and Umrah pilgrimage which sped up the process, and the Saudi Arabia Tourism Authority is supposedly planning to open its first office in Jakarta soon.
For the Philippines, too, their Middle East air capacity has surpassed 2019 levels, with the UAE seeing a growth of 16 pc over pre-pandemic and Qatar 9 pc growth.
Slow progress in China recovery
OAG says that China, unsurprisingly given its complicated and recent reopening, is not keeping pace with its Asian peers, at just 50 pc of 2019 international air capacity in August 2023. But, considering it was at 13 pc in January 2022, it has been ramping up steadily.
Once more, there is a clear trend toward international routes seeing higher levels of recovery. Transit hubs, namely the UAE, that is 13 pc below Aug 2019, Singapore, 22 pc and Hong Kong 29 pc. For capacity to these destinations, national flagship carriers are taking the majority share of the routes. With Russian airspace remaining problematic, these hubs seem to be the logical transit points to bypass the issue, says OAG.
Of the top 10 international destinations by seat capacity from China in August 2023, those which are seeing the lowest levels of recovery, Japan is still off 55 pc, Taiwan is 48 pc below and Vietnam 52 pc below. OAG says that Taiwan and Vietnam were not initially on the permitted list for Chinese outbound tour groups in February 2023. Vietnam was added in March 2023, Japan was just added in August 2023, and Chinese Taipei is still waiting to be added. However, one of the international destination routes that does have surprisingly low growth from China is Thailand, a drop of 63 pc.
The low recovery rate of air capacity between China and Thailand explains Thailand’s lower than average international seat capacity recovery, a drop of 31 pc vs August 2019. In August 2019, China accounted for the lion’s share of all of Thailand’s international seats at 24 pc, totalling 2.3 million seats. That’s almost four times the second largest international route by capacity, Singapore, at 638,000 seats.
But it remains troubling that recovery for this particular route from China seems to be ramping up more slowly in comparison to other Asian destinations. Thailand is also seeing low levels of recovery from Japan, off 43 pc and its latest desired source market, India, is lagging at 29 pc below, too.
Srettha Thavisin, the newly elected Prime Minister in Thailand, promised in late August to revisit visa requirements for Chinese and Indian travellers, believing that this was one of the greatest factors holding back recovery, particularly after the Tourism Authority of Thailand said that easing visa restrictions could add an extra 700,000 Chinese visitors in 2023.
The Golden week holiday proved to be an opportunity not to be missed to implement a visa waiver scheme for Chinese travellers and the Prime Minister personally greeted the first flight who arrived on September 25 from Shanghai, under the new visa waiver scheme.
Looking at the flight capacity data tells of challenges ahead however – yes, the easing of visa restrictions potentially will generate additional interest, but will there be the flight capacity to carry those additional passengers to Thailand? With Chinese carriers yet to fully file their winter schedules, only time will tell.
Vietnam gains at Thailand’s expense
Thailand also faces a challenge for its inbound tourism industry when it comes to Japan, its second largest air capacity destination in Aug-2019, which dropped to seventh place in Aug-2023. Thailand is concerned about a potential tourism deficit between the two countries: whilst in Jan-Jul 2023, 547,000 Thais visited Japan, just 393,000 Japanese travellers visited Thailand in return. Thailand’s overall target for international visitors of 29 million may look feasible, given that it was at 17.6 million as of August 29.
Whilst Thailand is grappling with returning to pre-pandemic air capacities, Vietnam, by contrast, is seeing some outstanding recoveries: Japan at 13 pc, Taiwan at 14 pc, Australia 71 pc and India growing from zero seats in Aug-2019 to 118,000 in Aug-2023. Indonesia, not in the top 10 for international seat capacity for Vietnam, has seen a 318 pc growth rate. The routes lagging behind from 2019’s Top 10 are China, off 66 pc, Hong Kong, a drop of 44 pc, Cambodia at 31 pc and, surprisingly given their closer ties politically, Russia (-98 pc).
However, China’s lack has not impacted Vietnam to the same extent as for Thailand, despite accounting for 15 pc of total international seat capacity in August 2019, says OAG.
Instead, Vietnamese airlines have been aggressively opening new routes and bolstering capacity, particularly between Vietnam-Australia and Vietnam-India. For India, routes are being largely operated with Vietnam Airlines, Vietjet and Indigo, whilst for Australia, Vietnam Airlines, Vietjet and Jetstar Airways have been jointly leading the charge. As for the Vietnam-Indonesia growth, OAG says that Vietjet has rapidly expanded its capacity from Aug-2019’s 8,000 to 73,000, a growth of 853 pc.
OAG says that Vietnam, having launched its reformed visa policy on August 15, is out to make its mark, but with just 7.8 million year-to-date international arrivals as of August 2023, it still has an uphill struggle to come anywhere near as close to Thailand’s inbound arrivals level.
