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Is the airline industry in Southeast Asia beginning to recover from the Covid-19 pandemic?

The airlines said that it carried 600,000 passengers in December, which is ten times higher than December 2020.

Is the airline industry in Southeast Asia beginning to recover from the Covid-19 pandemic?

Singapore Airlines (SIA), co-owner of Gurgaon-based Vistara airlines, says it witnessed an upsurge in the number of passengers it carried a month ago. The airlines said that it carried 600,000 passengers in December. This is ten times higher compared with the 64,600 it carried in December 2020, and an indication that the battered airlines industry in the region is beginning to recover from the Covid-19 pandemic.

The higher number is also due in part to the year-end holiday travel season in Singapore as well as the success of the vaccinated travel lane (VTL) travel scheme the city-state introduced. As of November 26 last year, a total of 24 countries including India, Sri Lanka, and the Maldives are covered under the Singapore VTL program.

Visitors from Qatar, Saudi Arabia, and the United Arab Emirates (UAE) were due to be added as VTL countries from December 6, but this arrangement was halted due to the emergence of the heavily mutated and more transmissible Omicron Covid variant. Since then, no other country has been added. Further, due to the Omicron variant, the Singapore authorities announced on December 22 that it will pause the sale of VTL air tickets till January 20 and half the quota for visitor arrivals under the VTL scheme. It had earlier set a daily limit of 10,000 travellers from VTL countries who can enter Singapore.

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SIA, in its statement, said that it "will continue to be nimble and manage its network in accordance with the prevailing market conditions and regulations." It also added that it expects passenger capacity for January and February of 2022 to be around 47 percent and 45 percent of pre-Covid levels respectively.

This implies that its customers do not cancel or change their plans due to travel inconveniences as some countries impose stricter border controls. If SIA does manage to achieve the expected passenger numbers for this month and next, the airline will continue to improve its performance. At the end of December 2021, SIA`s passenger network covered 85 destinations including Singapore, up by 13 compared to the end of the previous month.

AirAsia CEO Tony Fernandes recently said that he believes that the recovery in air travel has begun in earnest despite Omicron. “The good thing is, this time last year, we had no planes flying. Now, we`ve got a large chunk of our fleet flying domestic Malaysia, Thailand, and Indonesia,” he said, adding that demand has been "very, very robust.

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In a press release published on January 12, the International Air Transport Association (IATA) reported that total demand for air travel in November 2021 measured in revenue passenger-kilometers for November 2021 improved compared with the prior month. It was down 47 percent compared with November 2019, up 1.9 percentage points from October 2021’s figure of a 48.9 percent contraction when compared with October 2019.

Although the association noted that air traffic continued to recover in November, this was before the Omicron wave which sent some governments re-imposing some border restrictions only after lifting them a couple of months earlier. Willie Walsh, IATA`s Director General feels that governments have over-reacted to the emergence of the Omicron variant by resorting to "tried-and-failed methods of border closures, excessive testing of travellers and quarantine to slow the spread."

"Not surprisingly, international ticket sales made in December and early January fell sharply compared to 2019, suggesting a more difficult first quarter than had been expected," Walsh said. "There is little to no correlation between the introduction of travel restrictions and preventing transmission of the virus across borders. And these measures place a heavy burden on lives and livelihoods. If experience is the best teacher, let us hope that governments pay more attention as we begin the New Year."

With inputs from ANI

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