Aviation market demonstrating resilience and scale

Aviation growth is no longer demand-limited, but capacity and execution-constrained.

- By Nguyen Van Tuan Partner, LNT & Partners

Vietnam exemplifies this dynamic, combining strong demand fundamentals with urgent infrastructure and policy imperatives.The aviation industry last year marked a structural inflection point. Global passenger demand exceeded pre-pandemic levels, industry revenues reached historic highs, and Asia-Pacific emerged as the primary engine of growth. Yet this recovery has been constrained by aircraft supply impediments, infrastructure saturation, cost inflation, and intensifying regulatory requirements.

Global air passenger traffic surpassed five billion passengers last year. Revenue passenger kilometres increased by approximately 5 per cent on-year, while average global load factors exceeded 83 per cent, the highest on record. These indicators reflect strong demand and disciplined capacity deployment by airlines.

Industry revenues approached $1 trillion, supported by international travel recovery, yield stabilisation, and the continued expansion of ancillary revenues. Profitability improved compared to the immediate post-pandemic period, though margins remained modest, reinforcing aviation's structurally high fixed-cost and capital-intensive profile.

International travel drove most of the growth, particularly across Asia-Pacific, the Middle East, and selected European corridors. Leisure travel remained resilient, while business travel continued its recovery, especially on long-haul routes.