The cost of air tickets between two major Asian financial hubs jumped within 24 hours of Singapore and Hong Kong unveiling plans for a travel bubble that would not require people to quarantine upon arrival.
The cheapest price for a Singapore Airlines Ltd return economy seat to Hong Kong yesterday morning was S$558 (US$410) up until the end of December, versus around S$400 Thursday afternoon as the news was announced, the airline’s website showed. Return business-class fares rose about HK$5,000 (US$645) to HK$19,000. Cheaper flights were still available on travel Web sites including Skyscanner Ltd.
The COVID-19 pandemic has hit the flag carriers of Singapore and Hong Kong especially hard as they do not have any domestic market to fall back on. Prior to the pandemic, around 1 million trips were made between the two regional centers every year, data from the Singapore and Hong Kong tourism boards showed.
Hong Kong-listed Cathay Pacific Airways Ltd closed up 6.1 percent on Thursday and yesterday rose as much as 6.4 percent as investors digested the news. The agreement could lift Cathay’s monthly revenue by HK$90 million and reduce cash burn by as much as 6 percent, said Bloomberg Intelligence analysts James Teo and Chris Muckensturm, who assume revenue on the Hong Kong to Singapore route amounted to about 3 percent of Cathay’s total pre-pandemic.
Singapore Airlines, which yesterday rose as much as 1.4 percent, could see a S$15 million boost to monthly revenue and 6 percent reduction in cash burn, Teo and Muckensturm said. The route also made up about 3 percent of its revenue before COVID-19, they said.
The number of flights between Hong Kong and Singapore slumped, with only 54 round trips filed this month, down 90 percent from a year earlier, aviation analytics company Cirium said.
“Although the travel bubble will potentially facilitate increase of services by Cathay Pacific, Singapore and Scoot, who have continued to operate minimal services on the route through 2020, demand is expected to remain depressed in the near-term as passenger confidence remains low,” said Herman Tse, an analyst at Cirium.
Still, the bubble plan has encouraged some to book flights or make plans to travel. Singapore-based Clarence Foo, who works for APAC Realty Ltd unit ERA, said that four Chinese with Hong Kong residency had told him that they planned to fly down to the city-state and purchase luxury apartments.
“They’re constantly asking about the property market — whether it’s recovering and whether prices are coming up,” Foo said. “Some had planned to come down earlier in the year, but then Singapore imposed border controls. They know that the city’s property 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, compulsory quarantine would be replaced by COVID-19 testing. Singaporean Minister of Transport Ong Ye Kung (王乙康) said he hopes that the bubble would start in “weeks.” Other details of the agreement would be fleshed out later, the Hong Kong government said, without giving any date for when the plan would come into effect.
Singaporean Victoria Ho used to travel from Hong Kong back home to Singapore every month. After a hiatus, she is back on a plane this weekend. Although the bubble has not kicked in, she welcomed the announcement, saying it would allow friends to visit.
“I’ll be able to pop home to meet with coworkers and clients, because I do have meetings I’d like to make there,” she said.
Tan Wei Lynn, who works in the financial sector in Hong Kong, booked her ticket to Singapore soon after the announcement. She plans to stay for several weeks and not fly back to Hong Kong until December, assuming that there would be more details laid out by then.
“Having to quarantine is what’s stopped me, and a lot of people I know, from traveling,” Tan said. “Yes, tests are expensive, but it’s not about the cost of testing. We can’t afford to quarantine at one side or both sides.”
Luxury hotel Mandarin Oriental Taipei (文華東方酒店) plans to reopen its guestrooms in December to take advantage of a boom in domestic travel. The reopening would come six months after the five-star facility suspended room operations to cut costs as countries across the region impose border controls to contain the COVID-19 pandemic, diminishing demand for business travel. “We are delighted to share that Mandarin Oriental Taipei will resume room operations on December 1,” the hotel said in a statement yesterday. The hotel in Songshan District (松山) said it would adopt stringent health and safety practices to ensure the well-being of its guests and employees. It
HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) has approved two sustainability-linked loans totaling NT$450 million (US$15.55 million) for Taya Group (大亞集團) and Sinbon Electronics Co (信邦電子), the bank said yesterday, adding that interest rates would fall if the borrowers’ sustainability performance improves. Those marked the first sustainability-linked loans granted by HSBC Taiwan, it said. While HSBC Taiwan has experience providing green loans for the nation’s developers of renewable energy sources to support their projects, the bank began focusing on sustainability-linked loans to meet rising demand from companies in other sectors planning to undertake sustainability programs, it said. “As we reward our clients who reach their
‘NEW TRAVEL MARKET’: The carrier initially planned to lay off about 8,000 people globally, but after government intervention reduced that to 18 percent of its workforce Cathay Pacific Airways Ltd (國泰航空) would cut 6,000 jobs and close its Cathay Dragon brand, the South China Morning Post reported, as part of a strategic review to combat the unprecedented damage caused by the COVID-19 pandemic. The Hong Kong-based airline is expected to officially announce the plan after the market close today, the newspaper said. It initially planned about 8,000 layoffs globally, but after government intervention reduced that to 18 percent of its total workforce, including about 5,000 jobs in Hong Kong, it said. The company, which posted a HK$9.9 billion (US$1.3 billion) loss in the first half, has for months
LEANNESS-ENHANCING DRUG: Assigning a commodity classification to meat containing ractopamine could come under scrutiny by the WTO, the economic affairs minister said Minister of Economic Affairs Wang Mei-hua (王美花) yesterday rejected opposition lawmakers’ calls to assign a product code for US pork and beef containing ractopamine. Facing a barrage of questions from lawmakers at a meeting of the legislature’s Economics Committee, Wang said that giving meat containing residues of ractopamine a commodity classification code would sow confusion and could come under scrutiny by the WTO. “Ractopamine is not a [meat] product, it is an additive,” said Wang, when questioned by Taiwan People’s Party (TPP) Legislator Chiu Chen-yuan (邱臣遠). “If we had a serial code for every additive it would cause confusion. There is