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(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 an effective vaccine 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 aviation will almost fully recover,” 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 the city-state’s testing capacity is now around 30,000 a day and may rise to 40,000 by November and likely more later. A balance needs to be struck between travel and controlling the epidemic, Ong said.
When asked about Singapore Airlines Ltd., which posted a record quarterly loss in the three months through June and is reducing its workforce by about 20%, Ong said the airline is facing a “dire situation” due to the pandemic and the fact that there is no market to turn to.
Virus-related travel restrictions mean Singapore Airlines, which raised S $ 11 billion ($ 8 billion) largely through a rights issue at the start of the crisis, is flying a small fraction of its usual capacity. . Traffic figures for August show that the airline’s passenger numbers fell 98.4% from the previous year.
Whether Singapore Airlines needs to raise more funds will largely depend on the success of any revival in travel, 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 half of the S $ 8.8 billion it raised through the sale of shares, noting that airlines continue to incur expenses even when planes go 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 survey of travelers found that 83% said they would not travel if they were It will be for a period of 14 days. 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 pledged around S $ 100 billion in stimulus measures to combat the effects of the pandemic, including wage subsidies that will last until March.
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