News analysis

Singapore-Australia travel bubble might just work

Australia and Singapore are in talks over a possible air travel bubble.ST PHOTO: MARK CHEONG

SINGAPORE - Come July, Singapore and Australia could become the first countries to use "Covid-19 vaccine passports" for travel within a "bubble" of these two nations.

However, as the Singapore Ministry of Foreign Affairs said on Monday (March 15), everything is at a very preliminary and exploratory stage at present. Australians are already allowed to transit via Singapore without quarantine, provided they comply with Singapore's safety protocols.

It is now up to the two governments and their relevant agencies to hammer out the details.

Mr Alexandre de Juniac, the director-general of the International Air Transport Association (Iata), noted recently that global air travel will begin to recover from the middle of the year, though actual travel volume could be low compared with the pre-Covid-19 period in 2019.

A lot of this presupposes a global Covid-19 vaccination roll-out that gathers pace over the coming year. It also presupposes the widespread acceptance of these vaccine passports by countries across the world.

Iata is already working with states to design protocols and road maps for reopening borders. Key among these protocols is Iata's Travel Pass, a mobile health verification app that electronically captures the traveller's vaccination history and Covid-19 test results for cross-border safety checks.

Singapore Airlines has announced that it will begin testing the Iata Travel Pass on flights from Singapore to London.

Beginning this week, passengers on that route using Apple iOS-enabled phones will be able to download the Travel Pass app and create a digital identification with their photo and passport information. They can also submit flight information and book a Covid-19 test at one of seven participating clinics in Singapore, after which their test results can be viewed directly on the app.

Check-in staff at Changi Airport can then verify the travellers' status via the app, which will speed up the check-in process, according to the carrier.

But due to current regulations, travellers will still need to carry a physical copy of their health certificate issued by the testing clinics. China has announced its own Covid-19 passport system, while Germany and the United States are poised to come on board the Travel Pass initiative.

But the proof of the pudding will be in the eating.

This is not the first time Singapore has moved forward with the idea of a travel bubble. Earlier, its attempt to set up something similar with Hong Kong failed after Covid-19 cases in the Chinese territory surged.

But the Singapore-Australia deal might just work, and here's why.

First, both countries have low rates of infection in the single digits.

Second, both countries have critical stakes in opening up their economies to each other.

Singapore has a large expatriate Australian population that has been shut out of its home country for over a year. In addition, international travel for education, business and tourism contributed A$45 billion (S$46.8 billion) a year to the Australian economy before the pandemic hit and, last week, Universities Australia said that the decrease in international students had cost an estimated 17,300 jobs and A$1.8 billion in revenue.

For Singapore, an opening up would boost not just tourism receipts but also bolster its position as an Asian financial centre and the premier aviation hub in the region.

Australia is also the top education destination for Singaporean students and a leading tourism spot for Singaporeans in general. In addition, many Singaporeans have families Down Under.

If successful, this would be a template for more travel bubbles with other countries such as China, Japan and New Zealand.

The big question is interoperability and mutual recognition of these vaccine passports. A lot would also depend on how quickly the vaccine roll-out can be done.

Almost 9 per cent of Singapore's population of 5.7 million has been vaccinated. At the current rate of 25,000 to 30,000 vaccinations a day, Singapore should have vaccinated some 80 per cent of the resident population by the end of September - enough to achieve herd immunity.

However, the roll-out has been somewhat slower in Australia. According to Australian media reports, only about 0.5 per cent have had the jabs.

Still, things look hopeful.

Covid-19 cases worldwide seem to be on the retreat. Governments seem to be showing more resolve in handling the situation on the ground. People generally seem to be accepting safety measures such as the wearing of masks and social distancing.

The danger is the emergence of new strains of viruses in various parts of the world and whether the existing vaccines can deal with them.

Right now, all seems fine.

Normality is returning, albeit slowly.

Financial markets seem to be recognising this, judging by the sharp uptick in Bloomberg's World Airline stock index, which is up by more than 15 per cent in the past three weeks. And Singapore Airlines' stock is at a new year-high.


Singapore Airlines' stock is at a new year-high. PHOTO: ST FILE

But what will the new normal look like in aviation?

Iata reckons that even if traffic comes back in earnest, it would only return to 70 per cent of pre-pandemic 2019 levels by December - still a massive turnaround from the 92 per cent fall in air traffic last year.

Also, leisure and personal travel could come back more quickly than business travel.

The latter will gradually return, but given that companies have learnt to operate digitally and leverage technology, airlines may lose a third of their "front cabin" passengers.

There are still many imponderables between now and normality. But after a year of upheaval and distress, global air travel appears to be on the verge of a take-off.