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SINGAPORE: A delay in Asia’s first travel bubble between Hong Kong and Singapore has affected the stocks of its flag carriers and has highlighted the challenges facing the global travel industry as it tries to recover from the pandemic.
The arrangement was postponed on Saturday (November 21), a day before its launch, after Hong Kong reported an increase in COVID-19 cases. Authorities and aviation experts have said the bubble would provide a plan to travel without quarantine before a vaccine is widely available.
READ: Postponement of the air travel bubble a joint decision of Singapore and Hong Kong: Chan Chun Sing
READ: Singapore-Hong Kong Air Travel Bubble Launch Postponed for 2 Weeks Following Rise in Hong Kong COVID-19 Cases
“There is no question that there are many challenges,” said Singapore hotelier Marcus Hanna, who had received bookings from Hong Kong tourists and expects similar deals with major markets such as mainland China and Australia early next year.
“Let’s hope things improve in Hong Kong … many countries would have been looking to see how it goes,” said Hanna, general manager of Fairmont Singapore and Swissotel The Stamford.
Cathay Pacific shares fell as much as 6.6 percent in early Asian trading on Monday, their biggest intraday drop since Aug. 10, before cutting some losses to trade 5 percent lower. Singapore Airlines shares were 1% lower in a positive local market.
The two airlines have been hit harder by the pandemic than their global peers, as they have no domestic routes to turn to.
The bubble would only have brought incremental traffic to both cities. But Jefferies analyst Andrew Lee, who covers Cathay Pacific, said that for Hong Kong it could serve as a template that could be rolled out to 10 other countries next year.
Singapore and Hong Kong also set cautious conditions for the bubble, including a suspension if the seven-day moving average of the daily number of unrelated COVID-19 cases exceeded five anywhere.
READ: SIA, Cathay customers who no longer wish to fly after the Singapore-Hong Kong air travel bubble postponement can apply for full refunds
READ: The air travel bubble in Singapore and Hong Kong is an ‘important step’ for the continued recovery of the airline industry: SIA
A disputed travel bubble between New Zealand and Australia has also failed to take off, while Europe’s Baltic countries such as Lithuania, Latvia and Estonia created a short-lived travel bubble in May that burst in September.
“It’s important not to let this wipe out any momentum to open up safely in Asia,” said Brendan Sobie, an independent aviation analyst, of the Singapore-Hong Kong setback.
“It’s difficult to line things up given the various peaks.”
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