Cathay Pacific (CX, Hong Kong Int'l) has welcomed a new air travel bubble between Hong Kong Int'l and Singapore Changi as “a milestone development” and an important first step in facilitating the resumption of regular air travel between the two Asian financial centres.

Singapore and Hong Kong on October 15, 2020, announced they had reached a preliminary agreement to establish an air travel bubble between them, allowing travellers of all kinds to bypass quarantine.

Reacting to the announcement, Cathay Pacific Chief Customer and Commercial Officer Ronald Lam said: “Singapore is a popular destination for Hong Kong travellers for both leisure and business purposes. We are grateful to the authorities in Hong Kong and Singapore for reaching this agreement, which importantly will enable passengers travelling between the two cities to do so without any restrictions on the purpose of their travel, nor with any quarantine requirements for those with negative test results”. He said the airline looked forward to receiving further information regarding the details of its implementation.

Announcing the decision, Hong Kong’s Secretary for Commerce and Economic Development, Edward Yau, also called the agreement “a milestone in our efforts to resume normalcy while fighting against the long-drawn battle of COVID-19.” He did not specify a launch date but said the two governments would proceed with the next steps over the coming weeks, which included ironing out the details for laboratory testing and engaging with the airlines, reported the South China Morning Post.

Singaporean Transport Minister, Ong Ye Kung, said he hoped the air bubble could officially be launched within “weeks”, but that Hong Kong first had to go through a legislative process. The Minister also said a quota on travel numbers would be imposed initially, but details still needed to be finalised.

Hong Kong said last month it was also seeking to form travel bubbles with 10 other destinations, including Australia, France, Germany, Japan, Malaysia, New Zealand, South Korea, Switzerland, Thailand and Vietnam.

The number of flights between Hong Kong and Singapore slumped because of the virus, with only 54 rotations filed for October, down 90% from a year earlier, Bloomberg reported. Analysts said although the travel bubble would potentially facilitate an increase in services by Cathay Pacific, Singapore Airlines (SQ, Singapore Changi) and Scoot (TR, Singapore Changi), demand was expected to remain depressed in the short-term as passenger confidence remained low. None of the three airlines has yet scheduled regular flights between the two centres, according to the ch-aviation schedules module.

In the first eight months of this year, 22,590 people visited Hong Kong from Singapore, a drop of 93.7% cent from the same stretch in 2019. Overall, Hong Kong’s tourist arrivals collapsed 91.9% to 3.54 million over that period. Prior to the COVID-19 outbreak, around 1 million trips were made between the two regional centres every year, Bloomberg reported, quoting data from the Singapore and Hong Kong tourism boards.

Hong Kong’s borders have been largely shut since February, with only the airport, Hong Kong-Zhuhai-Macau Bridge and the Shenzhen Bay port remaining in operation.

Meanwhile, Bloomberg said the cost of air tickets between two Asian financial hubs jumped within 24 hours of them announcing the plans for the air bubble.
Shares of Hong Kong-listed Cathay Pacific rose as much as 6.4% on October 16, 2020, as investors digested the news. The agreement could lift Cathay’s monthly revenue by HKD90 million Hong Kong dollars (USD11.6 million) and reduce cash burn by as much as 6%, according to Bloomberg.

Singapore Airlines shares rose by 1.4% on the same day, with a forecast boost of SGD15 million Singapore dollars (USD11 million) to its monthly revenue and 6% reduction in cash burn. The route made up about 3% of both airline’s revenue before COVID-19.