Asia's aviation industry is booming, so why isn't it making money?

A surge in air travel has yet to pay off for Southeast Asian airlines, with experts predicting that 2019 will see more fierce competition as regional carriers struggle to return to profitability. Only six of the region’s 20 publicly traded airlines made a profit in the last reported quarter, according to a study by the Sydney-based CAPA Centre for Aviation, while 19 airlines posted declines in profits from the same July to September period a year before. The study said Southeast Asia was a market of “rapid growth but meagre profits” and forecast that “profitability will likely slip further following a deterioration in market conditions”. “This has been happening for several years. The main reason is the intense level of competition,” said Brendan Sobie, the study’s author. “Airlines have struggled to increase fares, which keep going down despite an increase in demand. And they weren’t able to increase fare prices when fuel went up.” Executives from legacy airlines and low-cost carriers alike have been left scrambling for answers. Krittaphon Chantalitanon, VP of commercial strategy at Thai Airways, said the Bangkok-based flag carrier had faced up to the challenges of competition “with difficulty”. “The figures have been good and not so good,” he said. “We have to work very hard, just to look at the market and to try and adjust the inventory and the demand and everything else to mix and match with the markets. We have to become leaner, become even more efficient. We need to look left, right and centre for new markets just to sustain ourselves.” Story has significantly more detail.<br/>