Jamie Freed and Chen Lin

SINGAPORE (Reuters – Singapore Airshow will soon be dominated by the slow recovery of the Asia-Pacific aviation sector from the pandemic. But there are nascent signs for improvement, as Omicron-related concerns diminish.

With the Pandemic causing havoc in 2020, the biennial show was cancelled. This is as the industry tries to find a solution.

According to the latest figures, international passenger traffic in the region fell 93% from its pre-pandemic level last year. Airlines are heavily dependent upon freight revenues and the Chinese market for outbound tourism remains closed.

Skyscanner’s booking data suggests that the rebound is on its way. This year, countries like Australia, Thailand, Vietnam, Vietnam, and the Philippines have reopened to more tourists who are vaccinated without being quarantined.

The recovery of regional economies from pandemic-induced slumps is causing military purchases to increase. Countries are looking for ways to boost their capabilities. As a result, Thursday’s Indonesian order for 42 Rafale fighter aircrafts worth $8.1billion was a clear example.

SHOW SMALLER

Airbus, Boeing and other major companies are listed (NYSE:). Lockheed Martin (NYSE: ) will send its top executives to Singapore Airshow between February 15-18. This is an excellent opportunity for face-toface discussions with defense and commercial customers.

Asia’s largest aerospace event will have around two thirds less exhibitors in 2020, due to the difficulties of hosting the show.

Industry leaders decided against attending because of restrictions such as daily testing, no mealtime intermingling, and mandatory masks for the tropical heat.

Brendan Sobie from Singapore, an aviation analyst, said he expected quiet and local gatherings with many overseas executives meeting in the city center rather than the distant shows.

Sobie expressed concern about the show, saying that “the greatest fear of many exhibitors is a shortage of customers visiting.”

FEW ORDERS

Based in Asia-Pacific, 35% world’s commercial plane fleet is located there. But, just 4% of all orders at air shows during the past decade came from Singapore.

Most Asian airlines focused their efforts on deferring delivery and returning planes to lessors during the pandemic. However, Singapore Airlines (OTC) signed in December a preliminary agreement with Airbus for 7 A350 cargoers. This would reduce passenger plane orders.

Boeing has launched its freighter version last month of its 777X widebody, which will be competing against the A350 cargoer.

New generation planes are expected to reduce carbon emissions. This is an important goal for the industry, which aims to achieve “net zero” emission by 2050 using biofuels and improved engine technology.

U.S.-CHINA RIVALRY

This is because Southeast Asia, home to the two largest economies in the world, plays a crucial role in the rivalry between China and the United States.

China claims extensive territory in the South China Sea. These claims, it claims, are based upon historical maps. This has put China at odds with Brunei Malaysia, Taiwan, Vietnam and the Philippines who have rival claims to features and islands.

Collin Koh is a researcher at Singapore’s Institute of Defence and Strategic Studies. He said that there is interest among military buyers to buy big-ticket items such as new generation fighter planes. However, costs may be an easing factor following the economic recession.

He said that drones, fixed- or rotary-winged transportations, maritime patrol, and reconnaissance aircraft would all be in high demand due to their utility for peacetime purposes.