A Conversation With The New AAPA Director General

0:10Hello, everyone, and thank you for joining us for Window Seat, our Aviation Week Air Transport podcast. I'm ACW and Aviation Week Air Transport Editor-in-Chief, Keren Walker. Welcome on board. Now, this week, I'm absolutely delighted to be joined by a very special guest who is joining me from Asia. He is Wong Hong, the new Director General at the Association of Asia Pacific Airlines or AAPA. Wong Hong, welcome. Thank you for joining us. Wong Hong joined AAPA in April, bringing a wealth of international aviation experience that includes executive and management roles at Delta Airlines, where he was the airline's president for China, at Singapore Airlines, and at the International Air Transport Association, or IATA.

0:56APA is a Kuala Lumpur-based organisation that represents some of the largest and most prominent airlines across Asia and Australasia. It provides a common voice on issues like safety and regulation when communicating with governments, manufacturers, airport authorities and regulators and others. and it keeps its member airlines informed on all important industry developments. And there are certainly plenty of those, Wong Hong, yes? So given your extensive career across the air transport industry, what are your initial thoughts having taken the helm at AAPA? You came on board in April, as I said.

1:36Wong Hong: Thank you. Thank you very much, Karen. And thank you for having me at this podcast. I've taken up this role since April this year, and it's been about a few months into this job, and I'm really excited. As you know, and you mentioned earlier on, I spent a considerable amount of time in my previous job based in Shanghai. And in those last 10 years, I was focusing a lot more on the business, the airline business between China and US. So having been away from the Southeast Asia region, and I'm being Singaporean, I'm very excited to be back in this region. And of course, witnessing here in this region, it's a remarkable trend of growth momentum right after COVID since 2023.

2:24Wong Hong: It has been a very smooth ride, except until, of course, earlier this year, we can talk a lot more about that. But certainly in this role, it gives me an opportunity to really witness the growth in this region and support our member airlines in Asia Pacific, who are actively trying to cater and serve to all the customers in Asia and to connect them all around the world. So I'm really happy to take on this role and to help support the airlines in that direction. Excellent. Now we're going to drill down on a few of those things in a moment. But first of all, can I just ask you, you know, because you have so much experience in that part of the world with the industry, how, in your opinion, does the Asia-Pacific air transport market differ from other regions?

3:20Wong Hong: Well, if you look at the demographics per se, and the Asia-Pacific is a very large geography and it's not one contiguous block, if you like. So geographically speaking, it lends itself to a lot more opportunities that requires people to travel by air. And the other uniqueness in Asia-Pacific is that it's made up of a whole range of countries spanning from the Southwest Pacific and into Southeast Asia, up north into North Asia, and then moving westwards into the Indian subcontinent. So it's a very diverse geography to begin with and diverse cultures as well. And that's what makes it really unique, you know, at the onset.

4:06Wong Hong: The other thing I would say that really differs is if you have been looking at the trends for travel over the last 10, 15 years, you can see a very nice momentum being built in the Asia-Pacific travel. And the demand for travel will just continue. and simply because the demographics point to that scale of potential. Meaning to say the middle class population in Asia Pacific is the biggest, you know, potential, market potential that lots of companies, not just the airlines, keenly interested to try and tap. We're talking about nearly 50 % of the world's middle class actually resides in Asia Pacific.

4:53Wong Hong: and you know with that kind of potential that that brings about a lot of opportunities for my member allies to try and serve them yes as you say it's an absolutely fascinating region huge opportunities huge growth but also a very complicated region you know different lots of different countries means lots of different governments they change as well and lots of different things always going on and and also the things that are happening outside of that region still affect this region. So can we just maybe, can I just ask, you know, your thoughts and what you're hearing from your member airlines about the Asia-Pacific market, particularly on the financials and the operations side?

5:37Wong Hong: Yes, well, certainly coming off from a, you know, a solid year of growth in 2025, Asia-Pacific, our numbers have been showing something like a 9 % growth in traffic against 2024. And everyone was forecasting and really expecting a good 2026 momentum carrying through. And of course, we have three years of post-COVID recovery, which then of course lends itself to a good set of financials with profitable risk for many of my member carriers. But having said that, as we now transition into 2026, and the Middle East conflict that arose suddenly spun things in a complete 180-degree turn, simply because the fuel prices have really shot up and took everyone by surprise, and jet fuel prices, with the crack spread increasing, ever increasing since March.

6:45Wong Hong: which many airlines were actually, you know, really just refocusing their business on just trying to keep things going. First of all, they've got booking commitments from customers who already, you know, committed to fares that were paid, you know, a few months back. And that has been already locked in. So as far as revenues were concerned, you know, that couldn't change very much. But the cost was spiraling, you know, out of control. and that translates to a lot of anxiety and concern. Even at one point, there was a concern for fuel availability in the region in certain markets. I wouldn't say a lot, but certain markets even in Asia.

7:28Wong Hong: So many airlines had to scramble and understandably focusing on network operations, having to decide how would they rationalize capacity in light of the surging fuel costs that actually translates into operating losses for many of the routes. So for routes that were making good money, that's okay. But then there are many other routes that perhaps were thinner in terms of margin and straight away it turns into a loss-making set of operations. So clearly that sounded a lot of alarm bells across the board And many airlines obviously had the rationalized capacity to be able to try and sustain their business for however long the crisis was meant to continue.

8:19Wong Hong: But of course, today, here we are now in a few months down the road. It appears that at least there's some sort of stability. But yet, we are still facing a whole set of volatility going on. It's not something that airlines can be very certain about in terms of the fuel prices. The jet fuel costs are today something like about$120,$130, much lower than, of course, the heights of$200 US dollars a barrel, but certainly still far, far higher than what it was at the beginning of the year. So I would say it's been a challenging turn of events into 2026. And obviously, it has impacted the operations and the financials.

9:07Wong Hong: As we now are starting to see many of our airline members' financial results for the April to June quarter, they're starting to come off in the next two, three weeks. You would see more and more of the results that will be reported. yeah so a key word there is uncertainty that's that's such a an enemy of the airlines they're so used to it unfortunately but it you know there's still a lot of uncertainty but as you say um given all the situation that's been going on and given how how important it is to to really watch costs when some of those costs are out of their control particularly oil um what about demand, are people in the across Asia region still wanting to travel, still wanting to do those long flights?

9:57Wong Hong: Indeed, that has been the saving grace, I would say. Many of my airlines are telling me that despite some price increases because of either fuel surcharges or airfares having to be adjusted upwards, the drop-off in demand hasn't been as bad, which means to say there is still some desire for travel by the whole range of customers and willingness to pay. I guess maybe that's also everyone understanding the geopolitical situation. Everybody understands the fuel crisis, the Straits of Hormuz takes in the news and all across the world. So people kind of understand it. But I think the main question will come because in the coming months again, when people stabilize and get to a sense of normalcy or a new norm, would that be something that people will still be comfortable paying in terms of heightened airfares and increased prices?

11:06Wong Hong: And of course, the other potential headwind that many of the airlines are looking out is whether or not the inflation will start to kick in. And if that starts to play out in the coming months, then you've got another headwind to take care of because then that would certainly dampen demand. And we will really need to watch. So far, based on the latest information that I'm hearing from my member carriers, the summer season has been pretty good. Pretty good in the sense that the bookings haven't really dropped off that much. They're still holding out pretty well with the capacity, you know, that each airline decides on its own.

11:48Wong Hong: And so far, I think we're holding great. But of course, we were going, coming off the summer, then we'll need to see, you know, whether the demand will sustain or not. Yeah, it's a lot of good news there. People still want to fly. but of course it makes it even more complicated for an airline to know where to reduce capacity and where to make sure that you can still deliver. It's very complicated. What about the cargo side? That's a very important part of the Asia-Pacific, well across all of the Asia-Pacific airlines. It's a very, very key part. A lot of the airlines there started with cargo and have a long history there.

12:30What's going on on the cargo side?

12:33Wong Hong: Actually, cargo's results have been actually more impressive, I would say, and they're actually holding out really well. Some of the figures that we're seeing that are coming in are still showing good growth momentum. And I think a lot of it has to do with the fact that I think the manufacturing industries and the semiconductor has led the way despite tariffs that are still ongoing, imposed from the US, mostly from the US. And I think the supply chain for production and manufacturing for factories, they found a solution, I would like to say. I think this year you start to see that there are different patterns, different routes that They're being established by and large.

13:23Wong Hong: But still, you know, you would say Asia is still the manufacturing center of the world. And China, of course, plays a big, big part of that. And despite, you know, some of this heightened tariffs, they found solutions and ways to overcome. And today, I think we are in a fairly decent position with, you know, solid single digit growth figures over last year. So, you know, I think we're looking at latest numbers for the first time, about 7%. So that's pretty healthy, I would say, and we hope that will continue in the second half of the year. Yeah, that's interesting because it's rather like COVID.

13:59It's sort of what's helped the airlines to have some resilience, isn't it? Exactly.

14:06Wong Hong: Saving grace. Saving grace, yes. One other thing I'd just like to ask you is to, again, what feedback you're getting is on the supply chain, the provision and quality of new aircraft and engines and a lot more cabins and everything. It's been an issue, of course, worldwide, certainly an issue for a lot of the Asia-Pacific carriers. Do you get any sense that that's getting better? Based on the feedback that we're receiving, I would say, broadly speaking, the airlines have come to a certain level of expectation and they're trying to manage as best as can be. the underlying delays hasn't really changed, I would say.

14:49Wong Hong: I mean, it maybe has improved, but it's still a delay. And a delay is a delay, and the delays can be still fairly significant. Aircrafts that are meant to be delivered are coming two years further down the road. We've got engines also. But again, it's a spread. Certain airlines are having more waiting for the specific aircraft deliveries, but some of them are not able to receive more because of the engines. And, you know, it's a whole range of different types of issues. Some are also down to component level of shortage and all that. I mean, I won't go into all the details behind it, but we all understand it because this has not been a new topic.

15:32Wong Hong: This has been around for three, four years post-COVID, and we understand the reasons. But I suppose now airlines are trying to say, okay, whilst we understand all the constraints and the reasons and it's like a perfect storm happening for airlines right after COVID. It's more the solutions that I think the airlines are asking about. How best can we work together in this entire chain to be able to cope? Of course, we will do our best as far as airlines are concerned to keep some of the old aircraft. You have no other choice but to keep them running and keep them operating. You know, obviously it's suboptimal, but that's the best that we can do if there was demand.

16:14Wong Hong: And maybe some relief, I would say, in the last three, four months because of the fuel crisis. And, you know, some carers had to cut back some capacity. So maybe there's a little bit of a breather, if you like. But by and large, I would say the underlying shortage, it's still there. It's still prevalent. And, you know, it doesn't help, of course, you know, when you still see aircraft orders being placed. and that's also a signal of the optimism that carriers have for demand going forward in the next five, ten years. So the orders will come in, but the orders will just add up to the backlog that we're already seeing today.

16:52Yeah, so a mixed bag, an ongoing situation still, yet something else that the airlines are having to deal with, as you say, it's not really an ideal solution that, okay, well, because of the high fuel costs, it's not so important if the engines aren't they but you know at some point that's got to be fully resolved um that sounds like some progress getting made another thing i'd like to um just ask you about is um particularly on sustainability that to you know that we know how important that is to this industry but it does seem to me that the whole sustainability side has really um really taken on new meaning across Asia Pacific Airlines that they really put it forward and it's difficult as you know because there just isn't enough sustainable aviation fuel.

17:42Again what's the feedback that you're getting? It's hard enough with just all the things we've talked about. It's hard enough to make money as an airline right now and then you've got additional costs of sustainability, is it still a priority for the airlines?

18:00Wong Hong: Certainly, certainly. Well, you know, this is what I would call sustainability is a topic that's, you know, it's not urgent, but it's very important, right? Not something that we have to solve today, but something we really have to solve it eventually. So, you know, it is a very challenging topic because it requires so many stakeholders from the government right down to obviously the fuel suppliers, the feedstock producers, and then down to the airports to deliver the fuel to the aircraft and so on. So it is a very complex set of challenges that airlines are facing. And if you heard what Willie Walsh said in the IATA AGM in Rio, You know, even 2050, net zero is actually a risk.

18:55Wong Hong: Talking about just right now in 2026, you know, projections are that SAF is just nowhere near. I mean, not even getting close to 1%. It can't even get to 1%. I mean, so when we're staring at these sets of numbers, it is very, very challenging. And Asia Pacific is no different. I would have, there's a lot of comments I'm happy to share. and some of the pointers. I mean, first of all, we in Asia Pacific, AAP has set a goal for a 5 % SAF. That's an aspirational goal that we want to be able to send the right messaging to all players to say that, hey, we are committed because we want to do the right thing as an industry in Asia Pacific.

19:42Wong Hong: But it's difficult to achieve a goal if today the supply is so scarce and there's just not enough. Or there's not enough at the right price. I mean, you know, when we ask the same question, fuel suppliers are telling us, oh, we have, we certainly have, you know, sufficient. We can deliver the fuel or the percentages of SAF, if you want, to the quantums that you want, but at a high price. And those prices are completely, you know, I mean, I think they're not realistic, right? Because if you look at those prices, as compared to what airlines are having to pay for fossil fuel prices. Again, notwithstanding the current fuel crisis again that has surged.

20:29Wong Hong: But if you go and you compare, it is still two to four times more expensive. So how can you expect the airline as one player absorbing all of that? I mean, I made this at some of the forums, at the SAF forums and climate change conferences. making it very clear, it is a collective responsibility. And that means, you know, all players will have to find some ways to get to the solution. And the solution cannot be, you know, that the airline is the only player that has to absorb all that cost. Even the traveler, the customer, of course, also will have to play some roles. And I think it's a long educational process.

21:11Wong Hong: But everybody, you know, has to chip in, if you like, right, and play some part so that this can become more feasible, financially feasible, and operationally feasible so that this can still continue. Because the airline industry serves a common good for everybody, for humanity, and to connect people around the world. People still want that, right? I mean, it's not something that people are saying, oh, if it's two weeks, if it's not doing the right, I don't want to fly. It's not right. So I think we need to try and help this process along the way, but with better education. And governments can spearhead and take a much more active role.

21:57Wong Hong: And this is what we're pushing also in Asia-Pacific. And I'm glad to say there has been some momentum because we are looking across the regions and we're looking at some of the countries. We've got good examples from Thailand. We've got good examples from Japan, you know, whose governments are, you know, taking a leadership role and trying to bring all the players together and then work towards some solution. Mandate is a good thing, but it cuts both ways. It can be a bit tricky, right? But mandate must also translate to commitments, right, by all players to be able to give enough supply or produce, you know, enough staff so that, you know, this can be consumed, you know.

22:39Wong Hong: and also hopefully at more reasonable prices. So there's a lot more work that needs to be done. And this is a huge, huge topic. Sorry to belabor this point, but it's a very complex topic as well. And just to add one more point, I think if you look at the recent developments in Europe, the European Commission has just came out with a new set of recommendations. They're pushing this, of course, through the process, through parliament and the states in Europe. But this solution coming out or this proposal coming out is not going to work. I mean, it's another action that will end up fragmenting the process because, you know, ICAO has already obtained pretty much global support on Corsair, which should be the only mechanism, a market-based measure mechanism, to help support this process.

23:40Wong Hong: So again, that's another whole train of subject where we can dive into. But of course, in the interest of time, I shall stop here. But I think that suffice to say that our airlines are very keen to support the process in Asia Pacific. And we want to do the right thing. But we've got to work on this together with all the other stakeholders. you made some excellent points there it is such a complicated but very important subject and just getting more and more challenging by the day it seems you know but i love the fact that you know obviously it's it's it's everybody airlines can't just turn around and make a saf um number one but so governments of course are important the oil industry is important you know and they've been largely backing away in many places from the SAF side.

24:38And I love the fact that you made the point about the passengers as well, you know, that you don't hear people. Well, if you ask people, you know, who are flying, they force. So, yes, we want our airline to be more sustainable, but they've got to also be part of what makes that possible. You know, what you said, I mean, it's fascinating and very good that your member airlines have committed to a 5 % SAF. But it's also sort of sad in a way, isn't it? I mean, like 5 % is still going to be a terribly hard goal to achieve, but everybody's realistic with it can't be higher than that at this stage. It's a very complicated problem.

25:21Wong Hong: You're right, you're right. I mean, even 5%, as you say, if you look at it at face value, it seems like, oh, we're so far away from where we need to be. but even at 5%, we're going to have challenges already now. And that's actually the alarm bell that's being rung. So we're asking questions and saying, how can we really get going, right? And we need to build some momentum. It's not something that even if every party says yes, it's not going to happen tomorrow. So, but things got to start moving before you can get to even the 2030 ambition and you get anywhere close to the 5 % goal that we're talking about.

26:00Wong Hong: So, you know, and I think, again, this is a very complicated subject matter and I certainly hope many governments, you know, would, you know, take the lead, you know, and try. Again, I can completely empathize it's not an easy process, right, to find a solution. And governments also may need to step in and offer some incentives and so on, you know, to be able to get things going. But it's, again, not very different from, you know, when we talk about renewable energies, right, if it's wind, if it's solar power, these are also many new industries that have emerged in the last 10, 15 years, also because government, you know, has stepped into support.

26:41Wong Hong: So likewise, I think SAF is not very different. And we certainly hope, you know, and there's going to be more collective ambition and effort and execution, right, towards these goals. Sure. And then although it's a little ways off, and so much can happen in a short time in this industry. In November, there'll be the AAPA Annual Assembly, of course, and that's a fantastic event. All the CEOs of your member airlines are there and lots of their executives, a very important forum. Can you just sum up for me, like I say, it's a little ways off, but what do you think are the sorts of themes or topics that you will want to address there?

27:25Wong Hong: That's a very good question, Karen. It's actually not that far off. We're actually starting to make active plans to sort out the program and looking at what would be the most interesting topics that the allies would be particularly concerned. And they don't move away very much from what we have just covered in our conversation. Sustainability, again, will continue to remain very important. It's a long-term goal, but there's now greater urgency to try and address and find good solutions. As I say, problems are plenty, but then where are the solutions? I think that's where we need to continue and be active dialogue and engagement with stakeholders.

28:08Wong Hong: The other subject is safety, and that's always very important for our airlines. And I think just a small example, I mean, and it's an important example because it's a growing concern where we get power banks on board flights that are actually turning to a high safety risk if they actually catch fire. And also because these are all regulations that can certainly help. And this is where IATA is, I'm sorry, IATA as well as ourselves, IAP has really pushed really hard and we're trying to put more clearer guidelines and hopefully ICAO will step in to support even further to be more clear. Many of our airlines already have taken their own initiative to try and work on this, to try and make sure that it is still very safe to fly despite the prevalence of a lot of these power banks that have been carried by passengers on board.

29:12Wong Hong: Then, of course, the supply chain, that's the other subject matter, which, like I said, hasn't gone away. And of course, I think broadly speaking, that will be what you see with the Assembly of Presidents coming up in the middle of November. So yes, there's going to be a very special assembly this year. Tell us a little bit about that. Yes, Karen. In fact, AAP has come a long way. And in fact, this year we will be celebrating our 60th year as an association for the region. So we're really excited to have everybody come together to reflect, of course, the past, you know, of how much, how long we have come, how much we have done, and also to have spent some time to celebrate amongst ourselves, right, as to, you know, how much was achieved, has already been achieved already over the last 60 years.

30:09Wong Hong: And we're also looking forward because I'm also excited as the airlines gather to try and see how the Asia-Pacific region gets redefined, simply because, as I mentioned earlier, there's tremendous growth potential in the middle to long term. There's also a lot of resilience that you see as a result of overcoming crisis after crisis. We certainly hope there will be less of it, but we can be quite sure there will be still some more obstacles along the way. And then, of course, with innovation, you know, also a tremendous opportunity using leveraging artificial intelligence. So I think, you know, all members are very excited to look ahead.

30:57Wong Hong: And as we gather in November for this particular, you know, event. Yeah, there'll be a lot of serious talk, but certainly some celebration, well-deserved celebration. so it's going to be a great event i'm looking forward personally to to being there so um uh thank you so much for all your insights for your time today i know you have a very crazy schedule um so we really appreciate you giving us your time today and like i say sharing some insights and the the that particular region of the uh of the elan world thank you also to our producers cory hit and natalia paleo and of course a huge thank you to our listeners subscribe to window seat on apple podcasts or wherever you like to listen and then till next time this is karen walker disembarking from window seat