Vietnam becomes ASEAN's 2nd-largest aviation market

BANGKOK — UK-based aviation data provider OAG reported that total airline capacity in Southeast Asia fell by 1.2 percent from July 2025 to 50.4 million seats in July 2026.

Vietnam has overtaken Thailand to become Southeast Asia's second-largest commercial aviation market, as overall airline seat capacity across the region declined, OAG said.

In Southeast Asia, domestic airline capacity declined by 1.3 percent and accounted for 45 percent of the region's commercial aviation market, while international capacity fell by 1.5 percent and represented the remaining 55 percent.

The contraction was attributed to rising fuel costs driven by tensions in the Middle East, which prompted several Southeast Asian airlines to reduce international services.

Indonesia retained its position as Southeast Asia's largest commercial aviation market, with 10.9 million seats in July, up 0.3 percent from the same month last year.

Vietnam moved ahead of Thailand into second place after recording 7.4 million seats, an increase of 5.6 percent year-on-year.

Vietnam Airlines, the country's national full-service carrier, also became the largest airline in Southeast Asia by seat capacity. It offered 2.81 million seats during the month, up 0.1 percent from July 2025.

Thailand, previously the region's second-largest aviation market, fell to third place with 6.9 million seats, down 3 percent year-on-year.

Malaysia ranked fourth with 5.2 million seats, down 8.3 percent, followed by the Philippines with 4.9 million seats, down 4.1 percent.

OAG data showed that Thailand, Malaysia and the Philippines all recorded declines in commercial airline capacity.

The reductions were linked to disruption caused by the conflict between Iran and the United States, as well as renewed tensions surrounding the Strait of Hormuz.

Jet fuel prices rose sharply and remained elevated as the situation intensified, increasing operating costs for airlines.

As a result, several carriers reduced or suspended direct and connecting services between the Middle East and the three Southeast Asian countries.

THE NATION, THAILAND