Podcast: How Airline Networks In Asia Are Evolving

Recorded in Xi’an, China, at Routes Asia 2026, this episode explores the key themes shaping air service development across the Asia-Pacific region—from shifting traffic flows and evolving airline strategy to China’s recovery and how the industry is balancing short-term uncertainty with long-term growth.

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David Casey (00:10): Hello and welcome to Window Seat, Aviation Week's air transport podcast. I'm David Casey, editor-in-chief of Routes. Welcome aboard. On this episode, we're coming to you from Xi'an in China, where Routes Asia 2026 has brought together more than 1,200 attendees from across airlines, airports, and destinations to discuss the future of air services, both new and existing. It's been a packed program with more than 2,500 pre-scheduled meetings, over 115 airlines represented, and countless conversations. I'm joined by three colleagues who've been right at the heart of the conversations. Tony Griffin, senior vice president at Aviation Consultancy, ASM, Edmund Rose, consulting director at ASM, and Chen Chuanren, the Southeast Asia and China editor at Transport World. Tony, Edmund and Chuanren, great to have you with us. Now, Xi'an is one of China's four great ancient capitals and the historic starting point of the Silk Road, connecting China with Central Asia, the Mediterranean, and Europe.

(01:12): And it feels fitting that we're here for a very modern version of that, forging new air links and global connections. But those connections are evolving in a complex environment. So Asia-Pacific airlines entered the second quarter of 2026 with a mixed operating landscape. On one hand, passenger demand remains strong and capacity continues to grow, but on the other, we have rising fuel costs, airspace constraints, and geopolitical tensions that are creating real headwinds. We've all spent the past couple of days in conference sessions, and Tony and Edmund, I know you've been taking part in meetings as well with airlines and airports from across the region. So just to kick things off, I want to get a sense from all three of you of what the overall sentiment is this year. How would you describe the mood at the event?

Tony Griffin (01:58): Mood at the event, like Routes events, really. It's one of upbeat, I would say. Positive outlook, notwithstanding the fact that the industry is faced with a crisis, but that crisis is also being felt globally as well. I'd say it's one of resilience. I think one of the most interesting things coming out of the event is whilst the ongoing crisis is very challenging for the industry, there are also opportunities for airlines and airports to be agile and benefit from changing travel patterns, changing travel demand from different regions within the global environment.

Edmond Rose (02:47): Yeah, I'd say the overall mood remains optimistic, but as Tony has said, airlines and airports are having to be pretty flexible. And I've seen plenty of evidence of that. I've also heard airlines saying that they're having some challenges making the case for new routes, but nonetheless, that doesn't stop them wanting to talk about it, wanting to hear from airports and tourism boards what they've got to offer.

Chen Chuanren (03:16): Yeah, I echo my colleagues about the sentiment, but of course we have to face the most outstanding issue that airlines are facing now, which is of course the Middle East disruption. And of course, what we are hearing right now is how airlines are coping, or shall I say, how airports are helping airlines to cope with this. Some airport authorities are rolling out relief packages to help them through the fuel crisis. We also hear how the passengers are becoming more creative in how they fly to other places in the world. So I think we can discuss that later in the podcast, but I think that's the overall mood of being creative and being together as a whole as an industry.

David Casey (04:02): Interesting. One thing that came through to me, I think, is that demand in this region is still really strong. We've heard how resilient passenger growth remains across the Asia-Pacific, but at the same time, as we've all flagged, there are those short-term operating environment challenges and it is making it more complex for airlines. I think if you think back to Routes World, which took place in October in Hong Kong, the focus then was very much on supply chain constraints, aircraft delivery delays, and how quickly capacity could come back in the system, but just six months on, that conversation I think has really shifted. We're now talking about fuel costs, as you said, airspace disruption, geopolitics, and those are all external factors that are much harder to predict and to manage. So Edmund, let me bring you back in here. I know you've been speaking with airlines this week.

(04:55): You also sat down for a keynote interview with the VP of Chinese carrier Spring Airlines, which is operating in one of the most complex environments anyway, in one of the most competitive markets anywhere. Would you say that airlines are not stepping back from growth, but it's becoming more disciplined? Is that a fair assessment?

Edmond Rose (05:14): Yeah, I agree that there's discipline. Actually, there is still the supply chain challenge in that aircraft deliveries are still behind where many airlines would like to be. I talked to Mr. Zhang from Spring Airlines in the conference session, and he was very much looking forward to big expansion of their fleet over the years and to doing more. So I think where we see right now, there's caution, still some problems with aircraft deliveries. Always, the airlines are thinking ahead to the future.

David Casey (05:54): And what does that caution mean in terms of route development? Are you seeing airlines stepping back from launching new routes or do you still think that we're going to see as many ... I think last year there was something like 4,000 new routes globally launched. A huge percentage of those were in the Asia-Pacific region. Tony, are airlines becoming more cautious about committing to new routes?

Tony Griffin (06:18): There's no evidence of that just as yet. I think to put this into context, airlines were experiencing probably the most rapid and unprecedented growth in recent years in the six months leading up to the current crisis. Places like Vietnam, Thailand, they were in aviation terms, overheating in terms of the growth that was being put into those markets. And as yet, a lot of airports are reporting that they expect traffic to be down, but actually at the moment it's not down. We are seeing some tactical reductions in capacity from airlines. I think Cathay Pacific recently announced they're going to cut back about 2% of capacity to preserve supply chain, essentially fuel to their main international networks. In Vietnam, there's some retrenchment of domestic flying. I'm yet to hear evidence of airlines pulling back on big chunks of international traffic and quite the opposite. Airlines are still committing to and going ahead with the launch of new routes because geographically, it's not all of the world that is being impacted in a negative way.

(07:39): We're in Asia, we're in China. I would say the impact in this part of the world is not as significant as it would be for some of the markets. Obviously, the Middle East is facing the biggest impact.

David Casey (07:51): You did mention the Vietnamese market then, which I think is an interesting one because we are seeing high fuel prices there and we're seeing some operational disruption in terms of supply. But I sat down with Jey Linggoswara, who's the VP at VietJet, and he said despite all the challenges that they're facing around those fuel issues, they are still very optimistic. So the focus is on optimizing the network in the short term, but at the same time they are looking to pursue some of those longer-term expansion opportunities that have been in the pipeline for some time. So part of that is opening a joint venture in Kazakhstan, and they're looking to expand into Europe, both one-stop via Kazakhstan, but also when they get the A330 NEOs into the system, they're looking at doing nonstop routes as well to Europe. So his tone was, I think he described the environment as being fairly fragile at the minute, but he said that the strategy wasn't necessarily to pause.

(08:45): It was to balance both, balance those short-term pressures, but also move ahead with the longer-term opportunities. And Chuanren, what are your thoughts on that? I know obviously, as we said before, you spoke to a lot of airlines during the conference.

Chen Chuanren (08:57): I think to add on to your point, I think Jey also mentioned not to always look long-term for more than five, 10 years, and not to always react to knee-jerk reactions. So I think that's the gist of most of the airlines' comments. And I think the point is that a lot of airlines are still capturing huge surges in demand because of the Middle East disruption. The numbers just came in yesterday, actually. Singapore Airlines reported an increase in 13.8% year-on-year RPK to Europe, double digits. And [unclear audio] reported 27.6% surge in transit passengers month-on-month compared to February. So in some ways, all these are huge opportunities for airlines to capture despite some of the rising fuel costs. And a number of airlines have also mentioned that the fact that they're now operating new generation aircraft, the A320 NEOs or the 737s, all these fuel-efficient aircraft are actually helping them to save fuel burn and in a way help them to save money.

David Casey (10:12): Edmund, turning to you though, Chuanren then mentioned about how the demand is there and it's an opportunity for carriers to capture it in terms of nonstop routes that bypass the Gulf hubs, but can they do that? Can they actually capture that demand because do they have the capacity or is it just a short-term opportunity perhaps rather than this more long-term and structural?

Edmond Rose (10:32): I think we know that particularly between Europe and Asia, but actually also between Africa and Asia, the Gulf hubs have been a very large part of the capacity. And it may take a little while before either there is sufficient stability for the Gulf carriers really to be operating at full speed or for travelers to be sure that that's the routing they want to go on. So can any direct flights fully compensate for lost capacity right at the moment? I think the answer is no, it can't. But what we are seeing is that where there, for example, you've got one of the Gulf airports in Muscat, where there's a carrier that has been pivoting more to point-to-point, they're looking again at connecting because they've been able to operate throughout this period, and Muscat is seeing an increase again in connecting traffic. So traffic flows one way or another, but I don't think the direct flights are really going to compensate fully.

David Casey (11:39): Certainly, what does this mean for airports in the region? Because in a more uncertain operating environment, I think the balance of risk between airlines and airports becomes more important. So are you already starting to see airlines asking for more support from airports and how is that going to manifest? Do you think it's going to be demanding greater incentives to launch new routes or maintain capacity?

Tony Griffin (12:03): Yeah, I think officially airports will say that airlines are not yet seeking special support for the circumstances they're in now. I think partly because let's not forget, airports and tourism destinations are also in the same position. I was speaking to the Airports of Thailand people and they have lost over 50 flights a day to the Gulf region. That's an incredible amount of passengers and also revenue to the airport. So like COVID, the airports are not necessarily in a position to offer more support. Unofficially, yes, the airlines are having conversations with airports as the relationship between airports and airlines is generally globally very good. They will try and work something out in terms of this. One thing I would caution on slightly though is the context that the industry has faced massive challenges in terms of COVID, probably the biggest. We had an oil crisis in the early '70s, we've had financial crises, we've had other pandemic situations, SARS in Asia, and the industry is very agile, very resilient, and has come through these challenges.

(13:33): Well, if we look at the recovery post-COVID, looking back, that was very rapid. And I think when this current crisis is resolved, which these crises will be resolved, then I think there'll be a lot of pent-up demand for travel and we'll be very quickly back in a situation where it's crazy, crazy numbers again.

David Casey (13:55): We did hear from ACI Asia-Pacific and Middle East Director General, Stefano Baronci at the conference session, and he talked about that long-term picture. I think he said that the region currently accounts for 37% of global passengers. That's about 3.6 billion travelers annually, but it's projected to handle about 10 billion by 2054. So the growth in this region is still predicted to be huge despite these short-term challenges. Chuanren, turning to you in terms of those markets that you're seeing strong performance now, which markets are standing out to you?

Chen Chuanren (14:31): I think for me, not being biased, but I think the Singapore market is surprisingly quite resilient. I think partly because of their strong oil and fuel reserves, and of course the refining capabilities back home in Singapore, that's something that a lot of Asia-Pacific airlines and should I say governments do not have. So we have not heard of major disruptions in the Singapore air hub yet. It's still operating as normal. So in a way, being stable and resilient in a state of the world that's spinning out of control gives many airlines a beacon or anchor to plant their roots and their operations around. Personally, I think the Singapore air hub will tend to benefit for now. Interestingly, I feel that Central Asia and China will also benefit from this whole situation. We see passengers becoming more creative in how they fly to Europe, and the fact that Chinese airlines can overfly Russian airspace gives them additional competitive advantage, and of course, cost savings for passengers as well.

David Casey (15:43): We're here obviously in China. What are your thoughts on what's happening in the China market? Because it is an interesting one. On one hand, I think we've seen the domestic market stabilize. Internationally though, we do have a lot of geopolitics playing in there. So we've got a big drop in demand to Japan, but we are seeing some other markets that are performing strongly. And as Chuanren just said, there's that long-haul opportunity into Europe because of the overflight situation with Russia.

Edmond Rose (16:07): You mentioned the opportunity there for the Chinese carriers to benefit from being able to ... Chuanren mentioned actually the benefit of the shorter journey times to Europe, and certainly they're very active in connecting traffic. So where traffic is down, say, point-to-point between China and Japan, they will be connecting passengers between Japan and Europe. On my panel about disruption and geopolitics, I heard from Adelaide and Brisbane airports about how they're seeing many of their customers in the early weeks of the crisis in the Middle East were traveling through other routes, particularly through China to reach their destinations in Europe particularly. So the Chinese carriers, they're quite adaptable. It all comes back to this flexibility and adaptability that all the airlines have really learned a very strong lesson from through COVID. And in fact, I wrote something at the beginning of the year about precisely this point, how geopolitics affects traffic flows.

(17:13): And I said that the airlines have learned and the airports have learned too to be agile in their planning. And this crisis has just shown that up very spectacularly.

David Casey (17:23): Tony, any thoughts on what standout markets for you in this region?

Tony Griffin (17:26): I think the question is, which isn't a standout market in this region because if you go through the list of the big ones, Vietnam, Thailand, Malaysia, obviously China, all of them have performed, as I said before, rapid growth, and all of them have the potential to carry that on post this crisis. Australia is another one that so far hasn't been hugely impacted by the crisis. And again, that is an agile situation because talking to some Australian airports here at the conference, they're looking at India, direct flights to India. So a bit of Gulf bypass going on. Now, whether that's a long-term thing or whether that's just to mitigate the situation we're in now, I'm not sure. But Southeast Asia is the most populated place in the world. The demand is relentless. I think one of the issues for Southeast Asia might be actually the supply keeping up with the demand, even though there's a huge amount of fleet coming into Southeast Asia. As Edmund said before, there have been issues on getting the delivery into the market at a pace that meets the rapid demand.

David Casey (18:39): We're almost out of time for this episode, but let me finish with this. We've talked about uncertainty, we've talked about shifting demand, and we've talked about that long-term growth. So when we come back to Routes Asia next year, which will be taking place in New Delhi, what will we be talking about then? Will it still be about geopolitics? I guess none of us know how long this crisis in the Middle East is going to last for. How do you see though the rest of the year and the next 12 months ahead shaping up for the Asia-Pacific region?

Edmond Rose (19:07): I don't think any of us has a very good crystal ball. It's definitely cloudy. So much depends on what happens in not just in the short term, the next week or two, but also on how long once there is true stability in the Middle East, it takes for oil and gas to flow again through the Strait of Hormuz, for production facilities to be refurbished and brought back onstream. That takes time. So the disruption is going to carry on. I think what we will be talking about in Delhi is the amazing propensity of the Indian market to grow. I had an interview, a fireside chat with Arun Bansal from Adani Airport Holdings, which is the developer of Navi Mumbai International Airport, the new airport for the Mumbai area, and they started operations end of last year, and they have 75 flights a day already. Not many airports that are brand new can suddenly go from nothing.

(20:09): So that sort of volume, it's very demonstrative of what's going on in India. That's what we'll be talking about.

David Casey (20:14): And of course, we've got Noida still to open in Delhi as well, which will be operational this time next year. Chuanren?

Chen Chuanren (20:20): Yeah. Again, I echo Edmund's point about what's going to happen in the next year or so because it really depends on geopolitics, the men in the White House. But from an Asian point of view, we see diplomatic ties between India and China warming up. And of course, you see the new hubs in Central Asia being developed and routes being developed. I expect further discussions about connectivity between Central Asia, China, and India, which will be the two big players in the global aviation market. I guess my parting words, I'll paraphrase what Mr. Zhang from Spring Airlines said, a Chinese saying, if the sky falls down, the industry will hold it up together. So personally, the biggest takeaway from the last few weeks or so is for the industry to really collaborate in order to be resilient as an industry.

David Casey (21:16): And Tony, finally to you.

Tony Griffin (21:18): My crystal ball, we've got to be positive, and this is just my opinion. We will be talking about oil prices and we'll be saying, "Gosh, I can't believe oil prices a year ago were $150 a barrel and now it's $65 is my prediction." And I think also we'll be talking about how rapidly the Middle East recovered from this crisis. And I think the airlines will be groaning, not the Middle East airlines. The other airlines will be groaning that the Middle East price war will be in full effect and that we'll be seeing some real battlegrounds with Etihad, Emirates, Qatar, all trying to recover their traffic base and market share through pricing.

David Casey (22:07): Which could be very good news for passengers, of course.

Tony Griffin (22:10): Very good news for passengers, very good news for airports, generally very good news for airlines.

David Casey (22:15): Well, on that note, we are out of time for this week's episode of Window Seat recorded here in Xi'an at Routes Asia 2026. Thank you, Edmund. Thank you, Tony, and thank you, Chuanren, for joining me today, and thanks to our producer. You can find more coverage from Routes Asia on aviationweek.com. And remember, don't miss an episode of Window Seat by subscribing wherever you get your podcasts. Until next time, this is David Casey disembarking from Window Seat.