Full data from Airline Business’s benchmark airlines in Asia-Pacific shows a decline in profitability for the first quarter of 2025, despite an improvement in operating revenue and passenger traffic.
Aggregate data for the 11 airlines and groups included in the benchmark metrics reveals an operating profit of close to $1.25 billion – a 7.7% decline compared to the same quarter a year ago. Net profit was also down, at $906 million compared to $1 billion a year ago.
The drop in profitability was despite a 2.2% increase in operating revenue to $35.3 billion, as airlines in the region carried more passengers during the quarter. Traffic – measured in RPKs – was up 9.4%, outpacing a 6.6% increase in capacity, and leading to a 2.2 percentage point increase in load factors.
Indeed, during the quarter, airlines in the region note that travel demand remains robust – and continues to be in the near term. This is in spite of looming uncertainty stemming from the on-off tariff policies from the US government, and the specter of an economic downturn.
Korean Air, which was the first among the benchmark carriers to report, warned of political and economic uncertainties in the near-term, even as it anticipates strong travel demand in the first half of this year.
The SkyTeam operator said forward bookings “remain strong” on short- and medium-haul leisure routes, particularly on intra-Asian flights.
Meanwhile, Japan Airlines and All Nippon Airways (ANA) rode on the wave of strong inbound travel demand to remain profitable, even surpassing financial targets previously set. Still, ANA Holdings – the airline’s parent company – painted a mixed picture of how the uncertainty surrounding the Trump administration’s on-off tariff policies will impact demand.
JAL was slightly more sanguine in its forecast: international and domestic passenger numbers are expected to grow by around 10% in the April-June quarter.
The Singapore Airlines Group was perhaps the most direct in its assessment of the tariff challenges: group chief Goh Choon Phong says the issues are ”not likely to deliver a shock [to SIA] the same as [Covid-19] did.”
Most of the region’s benchmark airlines and groups saw a similar earnings trajectory: revenues were on the up – in line with passenger growth – but profitability fell amid rising costs. Korean, for instance, blamed depreciation and maintenance of newly introduced aircraft, while the SIA Group said a softening of yields led to slower revenue growth.
However, China’s ‘Big Three’ – Air China, China Eastern Airlines and China Southern Airlines – still found profitability elusive in the first-quarter.
Not only did they remain in the red, they saw their losses widen. This was on the back of tepid revenue growth amid capacity that has surged significantly beyond pre-Covid levels, with China Southern even reporting a year-on-year decline in revenue.
The ‘Big Three’ not only have had to contend with competitive “pressures” on the domestic front – both from other operators and the vast high-speed rail network – they have to deal with softer international travel demand.
The 11 benchmark airlines and groups included in Airline Business’s quarterly aggregate data for the Asia-Pacific region are: Air China Group, ANA, Cebu Pacific, China Airlines, China Eastern Airlines, China Southern Airlines, IndiGo, Japan Airlines, Korean Airlines, Singapore Airlines Group and Thai Airways International