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SINGAPORE (BLOOMBERG) – It will take at least two years for the global aviation industry to recover from the coronavirus pandemic and mass travel to return, Singapore’s Transport Minister Ong Ye Kung said, emphasizing the importance of developing a vaccine. effective and widely available to help countries open up. its borders.
“When a vaccine is widely available around the world and people gain the confidence to travel again and visit other countries, then we will have aviation back on its feet, almost completely,” Ong said in an interview with Bloomberg Television. “How long that will take, I can’t guess, I’d say at least a couple of years.”
Singapore has to “find ways to try to revive” the aviation sector, the minister said, adding that Singapore’s testing capacity is now around 30,000 a day and may rise to 40,000 in November and probably more later. A balance needs to be struck between travel and controlling the epidemic, Ong said.
When asked about Singapore Airlines (SIA), which posted a record quarterly loss in the three months through June and is reducing its workforce by about 20 percent, Ong said the airline faces a “desperate situation” due to the pandemic and the fact that it does not have a domestic market to turn to.
Virus-related travel restrictions mean that SIA, which raised $ 11 billion largely through a rights issue early in the crisis, is blowing up a small fraction of its usual capacity. Traffic figures for August show the airline’s passenger numbers down 98.4 percent from the previous year.
Whether the SIA needs to raise more funds will largely depend on the success of any travel revival, Ong said. “The more we can revive, the more cash they can generate, the less their need for recapitalization.”
A regulatory filing in August showed that the airline had used up half of the $ 8.8 billion it raised through the sale of shares, highlighting that companies continue to incur expenses even when planes are left idle. The company is reviewing its fleet and operations.
The International Air Transport Association, which represents some 290 airlines, has said that it does not expect passenger traffic to recover until at least 2024. A recent IATA traveler survey found that 83 percent said they would not travel if It will be a 14-day quarantine period.
To open borders and encourage people to travel again, the quarantine must be replaced by effective tests for Covid-19, Ong said. “We have to gradually open the borders, establish the key links that made us a hub.”
Ong said Singapore will need to review plans for a fifth terminal at Changi Airport. Construction of the terminal, originally planned for completion in 2030, has been suspended for at least two years.
“The assumptions when we entered Terminal 5 have totally changed,” said Ong. “I don’t have a prediction or a crystal ball to say what will happen to Terminal 5 and what will happen to global aviation.”
Singapore has promised around $ 100 billion in stimulus measures to combat the effects of the pandemic, including wage subsidies that will last until March.
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