Will The SEA Aviation Industry Bounce Back Soon?

Vaccination is key because with vaccination we can do away with quarantine, but countries need to recognize each other’s vaccines and vaccination programs

Air travel is needed to drive economic growth.

Domestic air travel is recovering with the easing of international air restrictions while in the South East Asian region, Singapore, for example, earlier this month agreed that Germany and Brunei travellers are allowed in the tiny republic. Signs are that other countries in the region will follow suit because air travel is needed to drive economic growth.

Leithen Francis, managing director of public relations agency Francis & Low says that there is a possible but slow turnaround in the industry with the pandemic now entering into the endemic phase.

“We are starting to see ‘green shoots of recovery because the Malaysian government and others in the region have largely accepted that COVID-19 is endemic and are implementing ‘living with COVID’ policies that involve stepping up testing and contact tracing, but allowing businesses – including airlines – to function again and restore services,” he says.

New travel rules will require that travellers do a COVID test before they board their departure flight and their return flight as COVID has made people far more health and safety-conscious.

“I think this will make people gravitate more to flying full-service airlines if they can afford to because there is a perception that full-service carriers take better care of their passengers, especially if there is an emergency. For low-cost carriers to compete, they will need to do more than promote their low fares. They will need to highlight how they take care of their passengers,” he says.

The airline industry in Malaysia is starting to recover but it is a slow, steady recovery starting with domestic air services. The inbound international tourism market in Malaysia will take longer to recover. Airlines, hotels and tour operators will need to work more closely to come up with packages that reassure foreign tourists that they will be looked after when in Malaysia.

“Vaccination is key because with vaccination we can do away with quarantine, but countries need to recognize each other’s vaccines and vaccination programs,” he opines.

Many people in South East Asia may be quite envious to see people in America and Europe do quite a bit of travelling, as travel resumed in North America and in Europe over the summer months of August and September this year. According to Brendan Sobie, aviation analyst at Sobie Aviation, this is well reflected in the figures as well.

“So here in Southeast Asia at the moment, international travel is still non-existent- it’s down 97% compared to pre-COVID times. For Europe, and North America compared to pre-Covid times, travel was down around 60% and globally it was down 75%,” he says.

“Domestically, in Southeast Asia, domestic travel was down about 90% due to the delta variant, while globally, it was only down 15%  which is a huge contrast. A lot of that was because of the recovery of the US and Europe and in some other regions as well.

He said there will be some correction in the next few months, as seen in the last year where there was more of a reopening, particularly in Europe last year, last summer in 2020 and then towards the end of the year there was another change to this.

“It hasn’t been a straight recovery curve, there’s been a lot of ups and downs and a lot of setbacks for those markets that have started to recover. And we’re starting to see that in September now with the US and Europe to some extent,” he says.

“Airlines that are having liquidity issues or don’t have government support, are more likely to struggle even if they’re in some segments that are better than some of the others. Some of the airlines around the world have been able to raise their liquidity and have very strong government support, but not everybody does and it’s kind of an unlevel playing field out there right now,” he adds.

“Overcapacity will come back, potentially soon because airlines will be eager to bring back capacity. And it could be ahead of demand so you will see some recovering demand but it will be very slow. Most airlines losing money prior to coming back — that could be a likely scenario, plus you have some new airlines coming into the market, startups and such which makes it more difficult,” Sobie says.

Previous articleDHL Express Raising Delivery Charges For 2022
Next articleCEOs In Asia Pacific Concerned About Supply Chain Risks

LEAVE A REPLY

Please enter your comment!
Please enter your name here