Airlines are looking to the East as the next big source of revenue.
The Far East, that is.
Carriers believe that Asia will be the next hot spot to satiate the travel demand. Airlines are boosting the number of flights to Asia-Pacific in the hopes that it will increase profits in 2024.
According to the Global Business Travel Association, travel to Asia-Pacific is set to grow 41 percent this year to $567 billion and could be as much as $800 billion by 2027. That includes traveling on U.S. domestic airlines as well as Air Canada.
American Airlines, for instance, is vying to become the first U.S.-based airline to fly a direct route nonstop from New York to Tokyo.
Experts at the travel analytics company Cirium expect flights to Asia to be up 79 percent in the first three months of 2024 compared to 2019, the last full year prior to the pandemic. The return of long-haul flights can be advantageous to an airline’s bottom line.
"The market here in the United States is more mature," United's chief commercial officer, Andrew Nocella, said at a conference earlier this month. "The growth rates of seven percent or eight percent or nine percent for the industry are just not going to be possible, but growing overseas, we think there's just a lot more opportunity."
Delta Air Lines said it will increase capacity to Asia by as much as 50 percent heading into the month of December and into 2024. United Airlines also said it plans to boost capacity to Asia. That includes flights to New Zealand and the Philippines. Air Canada said the increase in capacity to Asia would almost double its system growth in 2024.
Raymond James analyst Savanthi Syth said travel to China could emerge as a key player in all of this.
"I feel like Asia-Pacific is six-to-12 months behind what you've seen on the transatlantic – China being the wild card in all this," she said.
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