While international air travel and cargo demand continue to rise in the Asia Pacific, an overhanging supply crisis threatens to stall the region’s growth as the largest air transport market in the world.
According to the Association of Asia Pacific Airlines, demand for air services is strong, but growth has begun to moderate in 2025. Average load factors are at a record high of 83%, reflecting capacity constraints. “In 2025, over one-fifth of aircraft deliveries are expected to be delayed,” said Subhas Menon, Director General of AAPA. “Pandemic-induced supply chain disruptions remain unresolved, and there’s no clear path to any meaningful alleviation of these constraints. The U.S. Government’s tariffs onslaught is set to further complicate an already fragile ecosystem,” said Mr. Subhas Menon, Director General of AAPA.
Aircraft and engine production is a global effort, relying on components sourced from many different markets. The imposition of new tariffs and retaliatory measures threatens to drive up costs and slow production further, costs and delays that will ultimately be borne by airlines and their customers.
“Aviation supply chains were built on the efficiencies of open markets and international cooperation,” said Mr. Menon. “Now, that framework is being wholly undermined. Free trade has always lifted aviation and the broader economy. Trade barriers do the opposite, dragging everyone down,” said Mr. Menon.
The industry’s path to net-zero carbon emissions by 2050 is also under threat. Delayed deliveries mean airlines must keep older, less efficient aircraft in service, without any emissions reductions. Compounding this is the limited availability of Sustainable Aviation Fuel (SAF). Of the 1.5 million tonnes projected for 2024, only 1 million tonnes were produced.
“Worryingly, very few traditional fuel suppliers have joined the SAF supply chain,” Mr. Menon added. “Demand for SAF continues to outstrip supply, and costs remain prohibitively high. Regulatory frameworks to encourage SAF production are still underdeveloped, inconsistent, or insufficient.”
Asia Pacific airlines play a crucial role in connecting economies and communities, but are operating on slim margins. The rising burden of regulatory hurdles, surging equipment costs, and supply shortages threaten the long-term growth and sustainability of the industry.
Commenting on what more needs to be done, Mr. Menon said, “Aviation is a catalyst for sustainable economies and global connectivity. Its contribution to economic and social development is an outsized one, particularly in the Asia Pacific region. Airlines don’t manufacture aircraft, engines, fuel, or manage airports and airspace. Air services are clearly in demand, but meeting the demand is more difficult now due to factors outside the control of airlines. Governments and suppliers must step up to tackle this disconnect.”
