Opportunity for new transit hubs in Southeast Asia. Photo Credit: iStock/tawatchaiprakobkit
Southeast Asia has the potential to act as an alternative transit hub to the Middle East, amid ongoing disruption to travel in the region due to the Israel/US-Iran conflict.
This is according to discussions from a recent webinar hosted by global travel data supplier OAG, which explored how the upcoming summer season is shaping up for airlines and travel in the southeast Asian region’s largest markets, and what the latest data reveals about demand, capacity and resilience.
Sentiments in Southeast Asia
“There is definitely some optimism and some pessimism [around interruption to Middle East connecting flows] and maybe this is an opportunity for new transit hubs,” said Hannah Pearson, founder of Kuala Lumpur-based Pear Anderson, a sales representation and market intelligence agency focused on the Southeast Asian tourism industry.
Pearson pointed to findings released at the end of March, from a survey conducted by Pear Anderson and the Association of South East Asian Nations Tourism Associations (ASEANTA), showing that 64% of travel businesses surveyed believe that regional travel within Southeast Asia will be where demand is redirected to following the escalating conflict. Europe was also still seen as a popular choice, despite flight disruption.
While Pearson imagines there may be some “interesting new routes in Southeast Asia, currently, there remains “a lot of wait and see”.
In the coming months, the rising price of fuel is likely to continue seeing a knock-on effect on transport options across Southeast Asia.
“The impact is not just necessarily in the Middle East,” said John Grant, chief analyst at OAG. “It's about the impact on the supply of fuel and airlines [are] already relocating aircraft out of the Middle East.”
Global capacity down 1.9%
Most travel businesses surveyed (72%) reported at least some postponement or cancellation for travel to the Middle East, with travel to Europe similarly affected (70%), due to the Middle East being a major hub connecting travel between Southeast Asia and Europe.
Cancelled flights, closed airports, and other logistical barriers (46%) are the most common reason for the cancellations and postponements, but decision from clients (40%) was also a deciding factor.
OAG statistics showed that global capacity fell by 1.9% in March year on year due to the Israel/US-Iran war, with significant disruption continuing as the major Gulf hubs find their aviation markets restricted due to the ongoing conflict.
Caution varies
Market differences are also emerging as travellers adapt to ongoing disruption from the conflict, with groups from some destinations expected to continue to visit the Middle East or use it as a transit hub.
“Different markets will react differently – the Singapore market traditionally is a lot more reserved and a lot more safety conscious,” said Pearson. “Markets like Indonesia tend to be a little bit easier going.”