The rise of travel bubbles
October 21 2020 10:36 PM
By Alex Macheras
By Alex Macheras

By Alex Macheras

We’re now 9 months into the global health emergency of Covid-19, and the aviation sector continues to grapple with the ever-worsening impacts of this pandemic. For countries still battling with high levels of Covid-19 spreading inside the country (such as the UK and the US) recovery is not yet on the horizon for their respective aviation industries. 
For many East Asian, and South East Asian nations – (countries including South Korea, Singapore and Hong Kong) their strong response to driving down the number of Covid-19 cases has been somewhat successful, and with this comes plans to have their respective economies begin to bounce back. As Professor Devi Sridhar, an expert in global public health states “it is the virus killing the economy, not the restrictions themselves.”
Singapore and Hong Kong will open their borders to one another for the first time in almost seven months, creating the world’s first genuine travel bubble for the freedom of movement for leisure and business travel. The agreement exempts people in both cities from compulsory quarantine in an agreement that will reinstate links between Asia’s two premier financial hubs.
Compulsory quarantine is instead replaced by coronavirus testing, Singaporean Transport Minister Ong Ye Kung told reporters, and he hopes the bubble will start in “weeks.”
The two nations are able to open up to each other safely as both Hong Kong and Singapore have “low incidence” of Covid-19 cases and have full trust in each other’s robust test and trace” to manage outbreaks. “This has given us the confidence to mutually and progressively open our borders to each other”
Testing, tracing and masks are proven to be effective means of controlling transmission in dynamic community settings. Scientists believe that a multifaceted strategy that combines all three, alongside continued hygiene and distancing protocols, is likely to be the most robust means of controlling community-based transmission of Sars-CoV-2.
Hong Kong-listed Cathay Pacific Airways Ltd jumped as much as 7.8%, the most in more than seven weeks, before closing with a 6.1% gain. Shares of Singapore Airlines Ltd rose 0.6%. Both carriers have been hit particularly hard because they don’t have a domestic market to fall back on.
“This is a milestone development for Hong Kong and an important first step in facilitating the resumption of regular air travel to and from our home hub,” Cathay’s Chief Customer and Commercial Officer, Ronald Lam, said in a statement.
A Singapore Airlines spokesperson said the agreement was an “important step in our recovery strategy.” “We strongly support all efforts by the Singapore government to open up the Singapore air hub in a safe and gradual manner.
Both the Changi Airport and Hong Kong International Airport (HKIA) are currently at about 1.5% of normal passenger traffic levels. Passenger traffic at SIA Group and Cathay Pacific Group are at even lower levels – down almost 99% in recent months.
Travellers must have been in Hong Kong or Singapore for 14 days before departure and will need to take mutually recognised Covid-19 tests and require negative results.
“It’s a small step but a significant one because both Hong Kong and Singapore are regional aviation hubs,” Ong said. “For the two of us to be able to control the epidemic, to come together to discuss and establish this air travel bubble, hopefully sets a model for us to forge more such relationships and partnerships.”
The route between Hong Kong and Singapore is normally the 17th busiest in the world. Prior to Covid-19, about 1mn trips were made between the two regional hubs a year, according to the Singapore and Hong Kong’s tourism boards. The flight takes about four hours. Total trade between the two was about HK$362.7bn last year, according to Hong Kong’s Census and Statistics Department.
“We welcome the announcement by Hong Kong and Singapore on establishing a travel bubble between the two cities,” IATA said in a statement. “We also urge other governments in Asia to take a similar approach to replace quarantine with Covid-19 testing as part of their efforts to re-open their borders and start restoring their economies.”
Authorities from both cities will adjust – or even suspend – the number of dedicated flights under the arrangement based on the coronavirus situation.
In addition, Singapore, Hong Kong is also in talks with Macao and mainland China to potentially bring back travel.
Scientists have urged countries: The most important public health response in this pandemic is a robust system for testing, tracing and isolating, where test results are returned within 24 hours, at least 80% of people’s contacts are reached.
The news comes as Hong Kong based Cathay Pacific says it expects to run at 10% of its pre-pandemic passenger capacity for the rest of 2020. Passenger numbers in September fell 98.1% from the same month last year. “September rounded off what has been an incredibly difficult summer, traditionally the peak passenger travel season of the year,” said Cathay Pacific Group chief commercial officer Ronald Lam, in the airline’s monthly business update.
The airline said it expected to be operating at a quarter of its capacity for the first half of next year before passenger numbers start to recover in the second half of 2021.
Cathay Pacific's passenger numbers had seen only marginal growth from the previous month, even though the airline resumed routes to Cebu and Perth.
Cathay Pacific and Cathay Dragon carried a total of 47,061 passengers in September. Last year, the two airlines carried 35mn passengers on more than 81,000 flights.
The group’s cargo business has not been as badly affected, carrying 109,453 tonnes of cargo and mail last month, a decrease of 36.6% compared to September 2019.
Cathay Pacific secured a HK$39bn ($5bn) bailout plan from the Hong Kong government earlier this year.

The author is an aviation analyst. Twitter handle: @AlexInAir



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