Airline capacity to Japan is reaching peak levels, while Thailand’s biggest inbound market, China, is still below pre-pandemic numbers and down from last year.
OAG’s ‘Aviation’s Mid-Year Check In’ webinar showed Japan’s top ten visitor markets – including Australia, Singapore, Vietnam and China – now make up 88.3% of all international seats, up from 85.8% in 2019. Most markets grew in double digits, with China’s outbound travel to Japan surging.
“If you look at the Japanese market overall, in terms of visitor arrivals this year, it's up 21% year on year,” said Gary Bowman, director at Check In Asia. “The Chinese market is up 54% so far year on year in the first six months of the year, which is astonishing.”
Bowman pointed to Japan’s food appeal and well-placed airports. “A lot of the market from northeast and southeast Asia into Japan is short stay travel,” he said. “People don't stay very long... Growth into Japan could continue, particularly with World Expo Osaka this year”.
Southeast Asia: Capacity up, arrivals mixed
In Southeast Asia, airline capacity is generally rising – Vietnam (+16%), Malaysia (+10%) and Cambodia (+22%) performed well. Yet arrivals in early 2025 are mostly down or slowing, except Vietnam. Thailand saw a 7% rise in capacity but a 5% drop in visitor arrivals. China’s capacity to Thailand remains 45% below pre-pandemic levels and 20% lower than summer 2024.
OAG notes Thailand is diversifying with strong summer growth from India, Vietnam and Japan, offsetting China’s decline. The Philippines is trailing with capacity down 1.2%. Vietnam’s capacity finally surpassed 2019 levels after a slow recovery.
Mixed travel signals: From boom to caution
“This shows what a mixed picture it's been in the six months across the region,” Bowman said. “It's been a very, very mixed first half of the year and the reality of that is starting to kick in across the region in the travel industry.”
He added rising Covid costs, government borrowing, living expenses and taxes are influencing travellers’ decisions.
“This is a little bit different to a year or two years ago, where there was a degree of price elasticity,” he said. “People needed to travel... That urgency has disappeared, and the frequency of travel has gone, and we’re seeing real consternation in some of these markets, such as Thailand. Singapore is also having a few concerns as well; growth that was expected just hasn’t materialised.”