The Hong Kong Special Administrative Region’s flight capacity is set to increase around 10 percent in the second quarter, driven by additional seats on routes to the Chinese mainland and South Korea, even as services to the Middle East decline.

Capacity to the mainland and South Korea is set to rise 17 to 30 percent year-on-year, Bloomberg Intelligence said in a note published Tuesday. Parts of Southeast Asia are also showing robust expansion, led by Vietnam and Malaysia, on demand for short-haul leisure travel, analysts Eric Zhu and George Ferguson wrote in the note. Long-haul routes, including to the US and Australia, are expected to post gains of 15 to 16 percent.

Despite the dual shocks of the Iran conflict and soaring jet fuel costs, airlines are maintaining Hong Kong’s status as a transit hub. Cathay Pacific Airways Ltd’s passenger numbers rose 25 percent in March from a year earlier, with its passenger load factor jumping almost 10 percentage points to 92 percent as travelers look for routes that bypass the Gulf region.

ALSO READ: Experts: Jet fuel shortage opens opportunities for GBA aviation growth

Patches of regional weakness persist, with Japan capacity flat, while Thailand and Singapore face continued demand softness, according to the note. Global capacity for May has been reduced by about three percentage points, with all but one of the 20 largest airlines slashing flights, according to data compiled by analytics firm Cirium Ltd.