Here we go again.
The second attempt to create a "travel bubble" for flights between Hong Kong and Singapore will resume on May 26. Or that's the plan.
A similar scheme unraveled last November before it could begin, as COVID-19 raised its ugly head again here in Hong Kong. The city believes it has now got a fourth wave of infection under control.
The mutual-recognition scheme will enable quarantine-free travel between the financial capital of East Asia and the financial capital of Southeast Asia. Many multinationals headquarter their Asia operations out of one of the other.
The biggest corporate beneficiaries would be Cathay Pacific (CPCAF) and Singapore Airlines (SINGF) . Neither company has any domestic business at all. They have been surviving off freight flights, all the while burning cash by the millions every day.
Cathay shares climbed 2.9% in Hong Kong on Monday, while Singapore Airlines rose 2.4% in Singapore trade. But this has been a torrid time for Cathay, whose shares remain 28.6% below their level at the start of 2020, and the outbreak of COVID.
Shares of "SQ" - the Singapore carrier is often referred to by its airline call signal - had their breath knocked out of them by the outbreak of the pandemic as well. But they have regained lost ground, and more, leaving them 50.5% up from the start of last year. Its freight business has done well, shipping pharmaceuticals and other high-value goods, and the company is cashed up to take advantage after the COVID crisis.
It's a fragile travel bubble, but I guess bubbles tend to be fragile. It will be suspended for two weeks if the seven-day rolling average of daily infections rises above five per day for either Singapore or Hong Kong.
Crucially, only cases of local transmission count against that tally. Singapore has persistently low numbers of local infections, with 11 over the course of the last week. But it is still reporting a sizable number of imported cases, with 40 detected on Sunday alone.
Hong Kong is recording single-digit daily case loads for local infection, with 37 local cases over the course of the previous two weeks, and none at all on Sunday. Both cities normally are thriving transportation hubs, leaving them open to imported infection.
Travelers will have to download Singapore's TraceTogether app and Hong Kong's LeaveHomeSafe app, both designed to track your location in either city. The Hong Kong app in particular is unpopular with many citizens who dislike the idea of their government being able to trace their every step. The 2019 pro-democracy demonstrations left authorities longing for a way to identify and track people who took part.
The Singapore app has also raised privacy concerns, although the Singaporean public tend to be more accepting toward their government. The Singapore authorities admitted in January that the local police are able to access the data on the contact-tracing app. The Hong Kong government insists there is no track function on their app, other than recording sites where you logged in such as restaurants.
To take advantage of the bubble, Hong Kongers will have to be vaccinated against COVID-19, and only able to travel 14 days after their second injection. That requirement is not in place for Singaporean travelers. Travelers will also have to get a negative COVID-19 test conducted within 72 hours of their departure time, and to test negative again on arrival.
Travelers will not be allowed to board a plane unless they have remained in their departure city for 14 days prior to travel. One new change is that the 14-day quarantine period required after returning to either Hong Kong or Singapore from another country will now no longer count toward the 14-day stay-put measure. So someone returning to Hong Kong from the United States, for instance, would have to stay in Hong Kong for 28 days before they can depart for Singapore.
Singapore experienced a heavy infection count among its migrant workers, who are forced to live in state-built dorms. Many come from South Asian nations, where the "Indian variant" has now led to the world's worst COVID-19 outbreak.
Singapore has reported a total of 61,006 cumulative infections out of its 5.7 million population. Hong Kong, with 7.5 million residents, has reported 11,736 infections since the outbreak. Thanks to high levels of healthcare and a relatively slow infection rate, both cities have treated cases remarkably well, with 209 deaths in Hong Kong, and only 30 in Singapore.
Cathay will be offering one travel-bubble flight in both directions pretty much every other day through June 10, and every day after that. It says all flight crew will be vaccinated against COVID. Singapore Airlines will resume daily "bubble" flights on June 9, with flights every two days prior to that.
The Singapore Airlines subsidiary Scoot is already running service between Singapore and Hong Kong for passengers serving the normal two-week quarantine on arrival.
Controversially, Hong Kong is in mid-May also lifting its quarantine restrictions on residents of Guangdong Province and Macau. Macau says it will not reciprocate unless Hong Kong is able to post zero new infections for at least 14 consecutive days. Mainland China requires a 14-day quarantine period for travelers.
Hong Kong accounts for around 20% of arrivals in the gambling hub of Macau, so it should in theory be desperate for those visits to resume. Hong Kong already has of April 29 removed restrictions for Hong Kongers returning from mainland China and Macau, who also do not have to serve the normal 14-day quarantine for people returning from abroad.
Cathay is also flying from Hong Kong to Beijing, Shanghai, Chengdu and Xiamen in China, with additional routes to come.
Cathay has been losing around US$8 million per day, based on its record net loss of US$2.8 billion for 2020. Paying passengers were down 87%, and the reduction of flights also caused cargo to fall 34%. Cathay in 2020 landed a HK$39 billion (US$5.0 billion) bailout package led by the Hong Kong government, agreeing to conduct an overhaul of its operations that has seen it kill off its Cathay Dragon regional airline.
Singapore Airlines lost around US$10 million per day for the nine months through the end of last year, with passenger numbers down 97.6%. That produced a S$3.6 billion net loss for the first three quarters of its fiscal year, which runs through March. But it has also raised S$13.3 billion (US$10.0 billion) in funding to tide it over, leaving it with ample liquidity to capitalize once travel resumes. Cargo figures also rose 45.1% for the nine months through the end of last year.