SINGAPORE: China’s tepid post-pandemic recovery contributed to airports in Southeast Asia seeing a slower uptick in passenger numbers, compared to European and American counterparts.
Aviation analysts made this observation on the back of Singapore's Changi Airport announcing last Wednesday (Jan 22) that it handled 67.7 million passengers in 2024. This was 99.1 per cent of 2019 levels, before the COVID-19 pandemic hit.
Analysts gave credit to Changi Airport's recovery but noted that major airports in the West already have passenger numbers exceeding pre-pandemic figures.
According to news site Aviation Week Intelligence Network, airport passenger traffic across Europe had surpassed pre-pandemic levels in the first half of 2024.
The BBC likewise reported in July last year that London’s Heathrow Airport recorded 39.8 million journeys in the first half of 2024, compared to 38.8 million in the first half of 2019.
And according to data site Statista, US airports have been busier in 2024 than ever before, with daily passenger throughput consistently exceeding pre-pandemic levels in 2024, after roughly matching 2019 traffic in 2023.
It's a different picture in Southeast Asia.
Airports in Bangkok and Malaysia have reported strong recovery but with passenger numbers still below pre-pandemic levels.
Further north, Hong Kong International Airport served over 53 million passengers in 2024, a 34 per cent increase compared to the previous year - but still 26 per cent lower than passenger volume in 2019.
For Changi Airport, Singapore's Transport Minister Chee Hong Tat has said that traffic volume will likely exceed pre-pandemic levels this year.
One of the world's largest outbound travel markets, China only fully reopened its borders in early 2023, which was much later than Western countries, said Mr Mayur Patel, head of Asia at aviation data consultancy OAG.
“This delayed return of Chinese tourists has had a significant impact on regional airports in countries such as Thailand, Singapore and Japan, which rely heavily on Chinese visitors.”
He added that “ongoing economic concerns” in China, such as real estate sector troubles and lower consumer confidence, have further dampened demand for outbound travel.
As a result, many Chinese tourists have opted for domestic travel over more expensive international travel, said Mr Alan Lim from New York-based Alton Aviation Consultancy.
As of October 2024, China's international traffic demand is still about 25 per cent below pre-COVID levels.
“This has resulted in passenger traffic not coming back to pre-COVID levels in airports in many of these countries (in Southeast Asia), particularly those which do not have a domestic market, such as Singapore,” said Mr Lim.
Despite China's slow resurgence, Changi Airport has already restored pre-pandemic passenger flows from there - and then some.
Changi Airport Group (CAG) said in its statement on Jan 22 that China was its largest source market for 2024, with passenger traffic doubling from the previous year and surpassing pre-COVID levels by 6 per cent.
Shanghai also broke into the Singapore airport's top 10 cities for passenger traffic for the first time since 2011, registering a 94 per cent growth compared to the previous year.
Apart from China’s slow recovery, consumers across Asia have also been hit by high travel costs and inflationary pressure.
“Consumers in some Asian countries remain cautious with discretionary spending, prioritising essential travel over leisure,” said Mr Patel.
“Currency fluctuations, particularly in countries with weaker currencies relative to the US dollar, have also made travel more expensive.”
There are also operational challenges that Asian airlines have faced post-pandemic, such as persistent labour shortages and maintenance backlogs.
Mr Alfred Chua, Asia air transport editor at trade publication FlightGlobal, said supply chain and delivery issues have also led to delays in returning parked aircraft to service.
“This has a downstream effect on airports, where some airlines have not fully restored services, or have cut back on capacity because of a lack of aircraft or a change in network strategy, for example,” he said.
He added that airports could also be taking a more measured approach to passenger recovery.
“Some airports could be intentionally slowing down recovery to avoid the likelihood of travel challenges during peak periods (such as) delays, cancelled flights, manpower issues.”
Heathrow Airport in London pictured on Nov 28, 2023. (File photo: Reuters/Peter Nicholls)
Mr Patel said Western airports' faster recovery could be attributed to several factors: Relatively early reopenings; strong domestic and regional travel demand; aggressive tourism promotion; and adaptive airline strategies.
“In contrast, Asia-Pacific airports faced a more cautious reopening, slower return of business travel and greater dependency on international traffic, particularly from China,” he said.
He added that operational challenges faced by Western airports, such as manpower woes, have been less of a hurdle due to earlier government intervention and stronger financial recovery.
Alton's Mr Lim said traffic between the US and Europe has strengthened airport recovery in both regions. A stronger US economy and dollar has also facilitated an increase in trans-Atlantic flights.
But he noted that although Europe as a whole has returned to pre-pandemic levels, some reports point to half of the airports there with traffic still yet to catch up.
Travellers at Singapore's Changi Airport. (Photo: iStock/Bing-Jhen Hong)
Changi Airport will need to stay nimble and adaptable even as it's expected to meet pre-pandemic traffic figures this year, said the analysts.
Airport hubs like it have to focus on strengthening their network to grow their addressable market, not only in the surrounding region but also new destinations further afield, said Mr Lim.
“This will allow airport hubs to capture additional passenger and cargo flows with a better breadth of network and depth of frequency,” he said.
CAG said on Jan 22 that it added eight passenger airlines in 2024 as well as 11 destinations including Brussels, Vancouver and Phu Quoc in Vietnam.
This year, more new destinations will be launched, including Labuan Bajo in Indonesia from March and Vienna from June.
Mr Lim said Changi Airport also needs to continue providing efficient and reliable services to transiting and arriving passengers alike.
“This entails areas such as ensuring seamless transfers through the airport by transit passengers, bags and cargo; efficient ground handling operations that facilitates on-time performance; resilient processes that can adapt to disruptions; among others."
CAG in its statement last week said it would continue to invest airport infrastructure, systems and processes to improve handling capacity, "so as to be well-placed to support the rising demand for air travel in the coming years".
Mr Lim said that with Changi Airport's 2024 passenger levels at 99.1 per cent and “only less than a percentage point away” from pre-pandemic ones, its recovery trajectory was “less of a concern”.
And Mr Patel said Changi Airport has already taken extensive steps to drive recovery.
“External factors like geopolitical tensions, economic conditions and China's slow recovery remain significant challenges beyond its control,” he said.
“While the airport can continue to innovate and optimise operations, a full recovery also depends on broader macroeconomic and policy developments.”
06:06 Min
Between January and November 2024, Changi Airport handled about 61 million passengers. On an annualised basis, this is about 70 per cent of Changi Airport’s annual handling capacity of 90 million passengers across Terminals 1 to 4. Terminal 5 will enhance the passenger handling capacity and strengthen Singapore's status as a leading air hub. The construction of Terminal 5 is on track to begin in the first half of 2025. When Terminal 5 is operational in the mid-2030s, it will be able to handle an additional 50 million passengers per year. Transport Minister Chee Hong Tat gave this update in reply to an MPs’ questions in Parliament on Wednesday (Jan 8).
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Aviation analysts made this observation on the back of Singapore's Changi Airport announcing last Wednesday (Jan 22) that it handled 67.7 million passengers in 2024. This was 99.1 per cent of 2019 levels, before the COVID-19 pandemic hit.
Analysts gave credit to Changi Airport's recovery but noted that major airports in the West already have passenger numbers exceeding pre-pandemic figures.
According to news site Aviation Week Intelligence Network, airport passenger traffic across Europe had surpassed pre-pandemic levels in the first half of 2024.
The BBC likewise reported in July last year that London’s Heathrow Airport recorded 39.8 million journeys in the first half of 2024, compared to 38.8 million in the first half of 2019.
And according to data site Statista, US airports have been busier in 2024 than ever before, with daily passenger throughput consistently exceeding pre-pandemic levels in 2024, after roughly matching 2019 traffic in 2023.
It's a different picture in Southeast Asia.
Airports in Bangkok and Malaysia have reported strong recovery but with passenger numbers still below pre-pandemic levels.
Further north, Hong Kong International Airport served over 53 million passengers in 2024, a 34 per cent increase compared to the previous year - but still 26 per cent lower than passenger volume in 2019.
For Changi Airport, Singapore's Transport Minister Chee Hong Tat has said that traffic volume will likely exceed pre-pandemic levels this year.
Related:
THE CHINA FACTOR
One of the world's largest outbound travel markets, China only fully reopened its borders in early 2023, which was much later than Western countries, said Mr Mayur Patel, head of Asia at aviation data consultancy OAG.
“This delayed return of Chinese tourists has had a significant impact on regional airports in countries such as Thailand, Singapore and Japan, which rely heavily on Chinese visitors.”
He added that “ongoing economic concerns” in China, such as real estate sector troubles and lower consumer confidence, have further dampened demand for outbound travel.
As a result, many Chinese tourists have opted for domestic travel over more expensive international travel, said Mr Alan Lim from New York-based Alton Aviation Consultancy.
As of October 2024, China's international traffic demand is still about 25 per cent below pre-COVID levels.
“This has resulted in passenger traffic not coming back to pre-COVID levels in airports in many of these countries (in Southeast Asia), particularly those which do not have a domestic market, such as Singapore,” said Mr Lim.
Despite China's slow resurgence, Changi Airport has already restored pre-pandemic passenger flows from there - and then some.
Changi Airport Group (CAG) said in its statement on Jan 22 that China was its largest source market for 2024, with passenger traffic doubling from the previous year and surpassing pre-COVID levels by 6 per cent.
Shanghai also broke into the Singapore airport's top 10 cities for passenger traffic for the first time since 2011, registering a 94 per cent growth compared to the previous year.
Related:
OTHER REASONS
Apart from China’s slow recovery, consumers across Asia have also been hit by high travel costs and inflationary pressure.
“Consumers in some Asian countries remain cautious with discretionary spending, prioritising essential travel over leisure,” said Mr Patel.
“Currency fluctuations, particularly in countries with weaker currencies relative to the US dollar, have also made travel more expensive.”
There are also operational challenges that Asian airlines have faced post-pandemic, such as persistent labour shortages and maintenance backlogs.
Mr Alfred Chua, Asia air transport editor at trade publication FlightGlobal, said supply chain and delivery issues have also led to delays in returning parked aircraft to service.
“This has a downstream effect on airports, where some airlines have not fully restored services, or have cut back on capacity because of a lack of aircraft or a change in network strategy, for example,” he said.
He added that airports could also be taking a more measured approach to passenger recovery.
“Some airports could be intentionally slowing down recovery to avoid the likelihood of travel challenges during peak periods (such as) delays, cancelled flights, manpower issues.”
Heathrow Airport in London pictured on Nov 28, 2023. (File photo: Reuters/Peter Nicholls)
WHY THE WEST IS FARING BETTER
Mr Patel said Western airports' faster recovery could be attributed to several factors: Relatively early reopenings; strong domestic and regional travel demand; aggressive tourism promotion; and adaptive airline strategies.
“In contrast, Asia-Pacific airports faced a more cautious reopening, slower return of business travel and greater dependency on international traffic, particularly from China,” he said.
He added that operational challenges faced by Western airports, such as manpower woes, have been less of a hurdle due to earlier government intervention and stronger financial recovery.
Alton's Mr Lim said traffic between the US and Europe has strengthened airport recovery in both regions. A stronger US economy and dollar has also facilitated an increase in trans-Atlantic flights.
But he noted that although Europe as a whole has returned to pre-pandemic levels, some reports point to half of the airports there with traffic still yet to catch up.
Travellers at Singapore's Changi Airport. (Photo: iStock/Bing-Jhen Hong)
WHAT CAN CHANGI DO?
Changi Airport will need to stay nimble and adaptable even as it's expected to meet pre-pandemic traffic figures this year, said the analysts.
Airport hubs like it have to focus on strengthening their network to grow their addressable market, not only in the surrounding region but also new destinations further afield, said Mr Lim.
“This will allow airport hubs to capture additional passenger and cargo flows with a better breadth of network and depth of frequency,” he said.
CAG said on Jan 22 that it added eight passenger airlines in 2024 as well as 11 destinations including Brussels, Vancouver and Phu Quoc in Vietnam.
This year, more new destinations will be launched, including Labuan Bajo in Indonesia from March and Vienna from June.
Mr Lim said Changi Airport also needs to continue providing efficient and reliable services to transiting and arriving passengers alike.
“This entails areas such as ensuring seamless transfers through the airport by transit passengers, bags and cargo; efficient ground handling operations that facilitates on-time performance; resilient processes that can adapt to disruptions; among others."
CAG in its statement last week said it would continue to invest airport infrastructure, systems and processes to improve handling capacity, "so as to be well-placed to support the rising demand for air travel in the coming years".
Mr Lim said that with Changi Airport's 2024 passenger levels at 99.1 per cent and “only less than a percentage point away” from pre-pandemic ones, its recovery trajectory was “less of a concern”.
And Mr Patel said Changi Airport has already taken extensive steps to drive recovery.
“External factors like geopolitical tensions, economic conditions and China's slow recovery remain significant challenges beyond its control,” he said.
“While the airport can continue to innovate and optimise operations, a full recovery also depends on broader macroeconomic and policy developments.”
06:06 Min
Between January and November 2024, Changi Airport handled about 61 million passengers. On an annualised basis, this is about 70 per cent of Changi Airport’s annual handling capacity of 90 million passengers across Terminals 1 to 4. Terminal 5 will enhance the passenger handling capacity and strengthen Singapore's status as a leading air hub. The construction of Terminal 5 is on track to begin in the first half of 2025. When Terminal 5 is operational in the mid-2030s, it will be able to handle an additional 50 million passengers per year. Transport Minister Chee Hong Tat gave this update in reply to an MPs’ questions in Parliament on Wednesday (Jan 8).
Continue reading...