(Bloomberg) — Hong Kong and Singapore further delayed the keenly anticipated travel corridor between the Asian financial hubs, a setback for the region’s airlines and tourism businesses seeking to start a recovery from the coronavirus pandemic.
The travel bubble will be delayed beyond 2020, and the cities said Tuesday they will review the arrangement for 2021 toward late December. The pact, which would allow passengers to travel between the cities without a quarantine, was already postponed by two weeks on Nov. 21, a day before flights were due to start.
Although the cities’ virus outbreaks are far less intense than in places such as the U.S. and Europe, a recent uptick in cases in Hong Kong proved enough to halt the plan. The delay shows just how delicate the process of reopening borders is –even for places that have largely contained the coronavirus. The bubble was heralded as a pandemic world-first.
The two sides originally agreed that the pact would be suspended if local infections exceeded five on a rolling seven-day average. That wasn’t even met in Hong Kong before the initial delay, and more recently the city has seen an alarming jump in infections.
The decision was taken “in view of the severity of the epidemic situation in Hong Kong with the number of local cases of unknown sources increasing rapidly,” the Hong Kong government said in a statement.
Strict border curbs have helped Asia contain the coronavirus better than in other parts of the world, with countries from China to New Zealand limiting the entry of travelers and imposing mandatory quarantines as a way of stopping the virus at their doors. But the approach — which has seen some all but eliminate Covid-19 — has come at a heavy cost, decimating tourism with cross-border travel basically paralyzed.
While in-country containment of the virus has resulted in the world’s 10 busiest domestic air travel routes now all being in Asia, according to OAG Aviation Worldwide Ltd., Hong Kong’s Cathay Pacific Airways Ltd. and Singapore Airlines Ltd. continue to struggle as they have no domestic travel market to fall back on. Cathay shares added 1.5% Tuesday afternoon, while Singapore Airlines gained 0.9%. Both have fallen around 30% this year.
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A rise in cases in either Hong Kong or Singapore was always a risk for those who booked tickets when the bubble plan was announced on Nov. 11. It’s still possible to travel between the two cities, but a mandatory quarantine applies on both sides.
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After a long lull with just a handful of cases a day, the deteriorating situation in Hong Kong prompted the government to impose tighter social-distancing rules and to close schools again. The city reported 76 new infections on Monday.
Singapore and Hong Kong had said they hoped the agreement can be a model for other nations trying to open up. Air traffic globally is expected to be at just 33% of 2019 levels at the end of this year, and “hopefully” at 50% to 60% by the end of 2021, Alexandre de Juniac, director general of the International Air Transport Association, said last month.
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(Updates with comment from Hong Kong government in 5th paragraph.)
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