COVID-19 has had a devastating impact on airlines globally. But the Southeast Asian airline sector has been affected more than most regions, leaving several major players in a vulnerable position.
Southeast Asia’s airline sector is at a disadvantage due to the following:
- A slower than average recovery rate for passenger traffic.
- Domestic markets which are relatively small (with the exception of Indonesia).
- Conservative governments that have not yet reopened borders or any air travel bubbles.
- A relatively small cargo business.
- A lack of government support (with the exception of Singapore).
- A weak financial position that predates the pandemic.
This paper examines current market conditions and the outlook for the rest of 2021 and beyond. It briefly analyses many of the challenges currently confronting Southeast Asia-based airline groups, which have led to viability concerns and a poor short-term outlook.
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