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SINGAPORE: With the aviation sector hit by the COVID-19 pandemic, “now is not the time” to talk about imposing an environmental tax on Singapore Airlines (SIA), Transport Minister Ong Ye Kung said at the Parliament on Tuesday (October 6). ).
Doing so will make the situation worse for the national airline, which is trying to conserve cash and generate revenue right now, he added, responding to a question from Workers’ Party (WP) Member of Parliament Jamus Lim on why the Government would not. consider such a tax.
Earlier, in his ministerial statement outlining the government’s strategies to support the struggling aviation sector, Mr. Ong described the SIA as “far from out of the woods” despite a recent recapitalization exercise. One of the airline’s revenue-generating ideas was to launch flights to nowhere, he noted, although it was later scrapped.
READ: SIA scraps ‘flight to nowhere’ plan, launches limited airline meal service, tours and food delivery
“Whichever way SIA has decided, MOT (Ministry of Transport) would always do everything possible to support our national airline at times like this,” the minister said in his speech to the House.
“What I will not contemplate is imposing an environmental tax on them right now, as Associate Professor Jamus Lim pointed out in his question, because that will only make the crisis worse for SIA.”
Seeking clarification after Ong’s ministerial statement, Assoc Prof Lim said that it is “entirely possible” that the tax does not have an immediate concern about SIA’s economic viability if it can pass the cost on to consumers, for example.
The opposition deputy also asked if more innovative ways can be considered so that environmental needs “are not a victim” of commercial considerations.
“The simple answer is this, we are in a crisis,” Ong replied.
“SIA, as I mentioned, is carrying 1.5 percent of its passenger volume, so there is no question of passing the cost on to passengers; there are no passengers to transfer (the tax) to until now,” he added .
With the likelihood that SIA would have collapsed were it not for its recent recapitalization exercise, policy makers “will need to help SIA preserve as much cash as it can,” the minister said.
“So this is not really the time to talk about an environmental tax on EIS. If I had to do that… it would have made the situation much worse for SIA, ”said Mr. Ong, citing a Chinese idiom that describes a scenario of throwing stones at someone who has fallen into a well.
Urging caution, Mr. Ong said the international conversation on environmental taxes will continue when “things pick up again.”
READ: SIA crew recounts ‘sad day’ when airline announced cost reduction exercise
The six other MPs who asked the minister for clarification include Popular Action Party (PAP) MP Melvin Yong, who asked whether the SIA’s decision to gradually increase its flight operations is linked to the government’s ongoing negotiations on travel arrangements. reciprocal.
SIA has said that it will continue to increase flights gradually, reaching around 15 percent of its usual passenger capacity by the end of this year.
Mr. Ong responded that this is in part a business decision by the airline to maintain its presence in certain markets despite low demand.
The government support package for the aviation industry, announced as part of the Resilience Budget in March, also helps the national airline maintain a minimum level of air connectivity so that Singaporeans abroad can return home and Cargo flights can continue to ensure that supply chains are not affected.
PAP MP Sharael Taha wanted to know if anything could be done to reduce the costs associated with parking aircraft on the ground.
Noting that he does not have the details on that, Mr. Ong said that some of these fees have been removed during this period. “But it is not much or significant compared to the cost of operating an airline,” Mr. Ong said.
AIR TRAVEL WITHIN ASEAN
In his ministerial statement, Ong had said that pursuing more green lanes and negotiating air travel bubbles with countries with low COVID-19 infection rates were among Singapore’s plans to reactivate its air hub.
READ: Air Travel Bubbles, More Green Lanes as Part of Plans for Singapore to ‘Revive’ Changi Air Hub Amid COVID-19: Ong Ye Kung
PAP MP Saktiandi Supaat wanted to know the status of plans to open up regional air travel between ASEAN countries as test technology improves.
To that, the minister said: “As of now, I would not say that ASEAN is ready to discuss a regional plan, but individual countries … are doing our own assessment of what is safe and what is not safe.” .
Within ASEAN, Singapore unilaterally opened its borders to travelers from Vietnam and has concluded reciprocal greenway agreements with Malaysia and Brunei.
“We will therefore move in that direction, taking a country-by-country approach and keeping in mind that ASEAN is an important market for us,” said Mr. Ong.
READ: COVID-19: Singapore to lift border restrictions for some visitors from Australia, Vietnam
REDUCE THE NOTICE PERIOD AT HOME
Sembawang Poh Li San’s PAP deputy asked if MOT would consider reducing the stay-at-home notice period for territories that have been “relatively successful” in containing COVID-19.
For example, the stay-at-home notice period for China and Taiwan could be reduced from seven days to three to five days, he said.
Unilateral openings are better than reducing the 14-day stay-at-home notice period, Mr. Ong replied.
Countries such as Brunei, New Zealand, Vietnam, and Australia, except for the state of Victoria, have “similar or better” incidence rates and risk profiles compared to Singapore, and travelers from these countries do not have to go through a warning period. stay at home.
“When you have similar risk profiles, you don’t technically need testing. Because someone from those countries who comes to Singapore is no different than someone from Jurong, Sembawang or Bedok who goes to Changi airport, ”he said.
“But out of a lot of precautions, we still administer a post-arrival test. Once negative, they are free to move, ”he added.
WP MP Gerald Giam asked why incoming arrivals are placed on stay-at-home notices prior to their first COVID-19 test, rather than being tested on arrival.
All travelers Singapore unilaterally opens to must be screened upon arrival, Ong said.
Health Minister Gan Kim Yong added that for travelers entering and undergoing tests after stay-at-home notices, it is due to the incubation period of the virus.
“When they arrive, they may have become infected, and if we test them on the spot upon arrival, it may not be detected because there is (an) incubation period.
“And that’s why we put them inside the (stay-at-home notice) for the entire incubation period and test them at the end. And if they are still negative, that means they have passed the incubation period … and then we can allow them to enter the community, ”he said.
READ: COVID-19: 5 things you need to know about the business travel pass
BACK TO MAIN AIRLINES
Bukit Panjang’s PAP deputy Liang Eng Hua asked if it made sense to resume travel from a cost income point of view, given the current economic climate.
He cited measures such as reciprocal green lane arrangements, controlled itinerary, various COVID-19 tests, monitoring and surveillance, higher prices for airline tickets, as well as the cost for airlines to operate flights that are not full.
He also asked if the minister was confident of bringing back major airlines that may have moved out of Singapore.
While the operating costs of passenger services have risen, supply and demand have decreased, and there are many passengers who are still willing to pay more to travel, Ong said.
“I think the demand is there because the supply has been totally decimated,” he said.
On the return of the major airlines, Mr. Ong said: “That is why we must start taking action, as I mentioned, to start signaling that we would be determined, we are determined to maintain our status as an air hub.”
He added that the ministry is taking “active steps” to open borders and revive travel, and many in the airline industry are “still very interested” in returning to Singapore.
MEDIUM TO LONG TERM PLANS
Mr. Saktiandi asked Mr. Ong about the Government’s post-COVID-19 plans, such as infrastructure strategies, to “put us in better shape beyond a year ahead”.
“We are not lacking in infrastructure plans,” Mr. Ong responded, citing the new Terminal 5 at Changi Airport and the various improvements to the terminal.
“What we need now is not so much the hardware, but the software to be able to open our borders, to welcome travelers from one place to another, but to do so safely,” he said.
“And it will mean infrastructure like test capacity, like people who can do the test, like adopting new and novel test methods, including rapid test kits that allow us to open safely.
“This is what is fundamental now. If we succeed, if we can take the first steps, when there is a vaccine, when air travel reopens internationally, we will find that Singapore is up there, ahead of the curve and we can maintain our status as an air hub. “
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