Indonesia remains Southeast Asia’s largest aviation market despite regional capacity decline

Southeast Asia's aviation market contracted in May as airlines responded to rising operating costs and weaker capacity growth, according to data reported by aviation analytics firm OAG. Despite the downturn, Indonesia retained its position as the region’s largest air travel market, underlining the scale of domestic and regional demand across the archipelago.

Overall seat capacity across Southeast Asia declined by 3.1% year-on-year to 48.1 million seats, reflecting a broader trend of airlines trimming services as higher fuel prices pressure profitability and force adjustments to international networks.

Indonesia stays ahead despite capacity cuts

According to OAG data reported by VnExpress, Indonesia offered 10 million seats in May, making it the largest aviation market in Southeast Asia.

However, the country also recorded a 7% year-on-year decline in capacity, highlighting the impact of industry-wide cost pressures on airline scheduling decisions.

Thailand ranked second in the region with 6.7 million seats, representing a 4.7% reduction compared with the same period last year.

Other major Southeast Asian markets reported the following seat volumes:

• Vietnam: 5.22 million seats
• Singapore: 10.42 million seats
• Malaysia: 7.46 million seats
• Philippines: 5.7 million seats

The figures indicate that while demand remains substantial across the region, airlines are increasingly balancing growth ambitions against rising operational expenses.

Philippines emerges as the standout performer

The Philippines was the only major market highlighted as recording significant growth during the period.

Seat capacity increased 6% year-on-year to 5.7 million seats, making it one of the strongest-performing aviation markets in Southeast Asia.

Industry data cited by VnExpress attributes much of that growth to Cebu Pacific Air, which continues to expand its network amid strong domestic demand.

The country's geography also plays a crucial role. As an archipelago consisting of thousands of islands, air travel remains an essential mode of transportation for both residents and tourists. Strong domestic tourism activity has further supported passenger demand.