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SINGAPORE (BLOOMBERG) – The cost of airfare between Singapore and Hong Kong rose within 24 hours after the two places submitted plans for a travel bubble that would not require people to self-quarantine upon arrival.
The cheapest price for a return economy seat from Singapore Airlines to Hong Kong was $ 558 on Friday morning (October 16) through the end of December, up from around $ 400 on Thursday afternoon when the announcement was made. news, the airline’s website showed. Business class return fares increased from around HK $ 5,000 (S $ 878) to HK $ 19,000. The cheapest flights were still available on travel websites, including Skyscanner.
The coronavirus pandemic has hit Singapore and Hong Kong flag carriers especially because they have no domestic market to turn to. Before the Covid-19 outbreak, about a million trips were made between the two regional centers each year, data from the Singapore and Hong Kong tourism boards shows.
Hong Kong-listed Cathay Pacific Airways closed up 6.1 percent on Thursday and rose as much as 6.4 percent on Friday as investors took in the news. The deal could increase Cathay Pacific’s monthly revenue by HK $ 90 million and reduce cash spending by as much as 6 percent, according to Bloomberg Intelligence analysts James Teo and Chris Muckensturm, who assume revenue at the Hong Kong-Singapore route amount to about 3 percent. percent of total Cathay Pacific pre-pandemic.
Singapore Airlines, which rose as much as 1.4 percent on Friday, could see a $ 15 million increase in monthly revenue and a 6 percent reduction in cash spending, Teo and Muckensturm said. The route also accounted for about 3 percent of their revenue before Covid-19, they said.
The number of flights between Hong Kong and Singapore plummeted due to the virus, with just 54 round trips recorded for October, 90 percent less than the previous year, according to the consulting arm of aviation analytics company Cirium. .
“Although the travel bubble will potentially facilitate the upscaling of services from Cathay Pacific, Singapore and Scoot (which have continued to operate minimal services on the route through 2020), demand is expected to remain depressed in the short term as confidence from passengers is still low, “said Herman Tse, an analyst at Ascend by Cirium.
Still, the bubble plan has encouraged some to book flights or make travel plans. Singapore-based Clarence Foo, who works for the APAC Realty ERA unit, said that four Hong Kong-based Chinese nationals had told him they planned to fly to the city-state and buy luxury apartments.
“They are constantly asking about the housing market, if it is recovering and if prices are going up,” Foo said. “Some had planned to go down at the beginning of the year, but then Singapore imposed border controls. They know that the city’s housing market seems to be more resilient now as there have been more sales and prices are low, so they want to capitalize on that. “
Under the travel bubble, mandatory quarantine will be replaced by coronavirus testing. Singapore’s Transport Minister Ong Ye Kung told reporters that he expects the bubble to start in “weeks”. Other details of the deal will be released later, the Hong Kong government said, without giving any date on when the plan will take effect.
Ms. Tan Wei Lynn, who works in the financial sector in Hong Kong, booked her ticket to Singapore shortly after the announcement. She plans to stay for several weeks and not fly back to Hong Kong until December, and thinks there will be more details by then.
“Having to quarantine myself is what kept me from traveling, and a lot of people I know,” he said. “Yes, the tests are expensive, but it is not about the cost of the tests. We cannot afford to quarantine on one side or both sides.”
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