Capacity recovery is accelerating at Asia’s major airlines
Major Asian airlines are recovering their capacity faster than ever. Despite only flying 16% of pre-Covid capacity in September, Cathay Pacific is expecting to reach 70% by the end of 2023 and go back to normal by 2024.
As of December, Singapore Airlines expects to recover 80% of its pre-Covid capacity. Over the third quarter, Korean Air averaged 49%. By the end of next March, ANA expects to have recovered its domestic business fully, and international will have reached 60%. By April 2023, ANA will have at least 79% of its pre-Covid system capacity.
Every airline is recovering at its own pace. Singapore will keep its 80% capacity stable through next March while EVA Air made a double-digit gain, growing from 43% capacity recovery in September to 54% in October.
Apart from ANA, this cohort doesn't have much domestic exposure. In spite of a big domestic network, ANA hasn't recovered the fastest. Korean and Singapore have undoubtedly been boosted by government policies and airport hubs.
Apparently, some government intervention is keeping things from getting better. Asian airlines have a vast amount of case studies depicting how industry peers globally have dealt with recovery challenges. There will, however, be some unique factors.
In addition to capacity metrics, financial recovery and debt reduction are on the horizon.
Capacity's return will be shaped by new strategies. Considering Starlux flying to Los Angeles in April, EVA might de-emphasize its core North America network. There's an integration going on between Cathay Pacific and HK Express. Despite being small – it flew just 6% as much as Cathay in 2019 – it had a big impact on yields.
If Cathay starts accelerating, it might be one of the fastest climbs. Cathay will be eager to take advantage of the significant slot growth that Hong Kong is expected to experience when it commences operating all three runways at Chek Lap Kok at the end of 2024, likely affecting Cathay's target to have a full recovery by then.
With the aviation industry barely out of the woods, Cathay has a limited window to grab its last batch of slots.