SINGAPORE: A delay to Asia's first travel bubble between Hong Kong and Singapore has hit the shares of their flag carriers and highlighted the challenges facing the global travel industry as it tries to rebound from the pandemic.
The arrangement was postponed on Saturday (Nov 21), one day before it was due to launch, after Hong Kong reported a jump in COVID-19 cases. Authorities and aviation experts have said the bubble would provide a blueprint for quarantine-free travel before a vaccine is widely available.
READ: Singapore-Hong Kong air travel bubble launch deferred for 2 weeks after COVID-19 cases spike in Hong Kong
"There is no doubt that there are many challenges around it," said Singapore hotelier Marcus Hanna, who had taken bookings from Hong Kong tourists and hopes for similar arrangements with major markets like mainland China and Australia early next year.
"Let's hope that 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.
Shares of Cathay Pacific fell as much as 6. 6 per cent in early Asian trade on Monday, their biggest intraday fall since Aug 10, before paring some losses to trade 5 per cent lower. Singapore Airlines shares traded 1 per cent lower in a positive local market.
The two airlines have been harder hit by the pandemic than their global peers as they do not have domestic routes to fall back on.
The bubble would have only brought incremental traffic into both cities. But Jefferies analyst Andrew Lee, who covers Cathay Pacific, said for Hong Kong it could serve as a template that could be extended 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 unlinked COVID-19 cases exceeded five in either place.
READ: SIA, Cathay customers who no longer wish to fly after Singapore-Hong Kong air travel bubble deferment can request for full refunds
READ: Singapore, Hong Kong air travel bubble 'important step' for ongoing recovery of airline industry: SIA
A mooted travel bubble between New Zealand and Australia has also failed to take off, while Europe's Baltic countries of Lithuania, Latvia and Estonia created a short-lived travel bubble in May that burst in September.
"It is important to not let this kill any momentum to open up safely in Asia," Brendan Sobie, an independent aviation analyst, said of the Singapore-Hong Kong setback.
"It is hard to get things aligned given the various spikes."