While the global aviation industry has been decimated by the COVID-19 pandemic, the ten Southeast Asian countries which comprise the Association of Southeast Asian Nations (ASEAN) have experienced passenger traffic declines that have been much sharper than the global and Asia-Pacific averages. Data from Kuala Lumpur International Airport and other sources also indicate that international travel within ASEAN has declined even more than travel connecting with non-ASEAN countries.
Globally, regional international traffic is expected to recover faster than intercontinental international traffic. This is happening in Europe, the Americas, the Middle East and Africa but it has not yet happened in ASEAN.
ASEAN’s domestic aviation market started recovering in May and June, 2020, as countries lifted restrictions on internal travel. Domestic passenger levels in ASEAN are now at around 50% of normal levels overall with large variation depending on the market. However, revenues for domestic travel are much lower than for cross-border travel.
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International traffic in all ASEAN countries has been very limited since the beginning of April due to border closures and has still not started to recover. Total international passenger traffic has declined by around 98% since April. The three largest international airports in ASEAN – Singapore Changi, Bangkok Suvarnabhumi and Kuala Lumpur International (KLIA) – each had international passenger traffic declines of 98% to 99% in the first seven months of the crisis (April 2020 to October 2020) relative to the same period in 2019.
KLIA handled only 139,000 ASEAN passengers in the first seven months of the crisis, representing a 98.9% decline compared to the 12.5 million passengers handled in the same seven months of 2019. KLIA’s non-ASEAN passenger traffic declined by a more modest but still significant 97.4% from 13.4 million in April 2019 to October 2019 to 355,000 in April 2020 to October 2020.
Due to the suspension of nearly all international passenger travel and the fact domestic revenues are very limited, many ASEAN airlines are unable to cover fixed costs and are suspending or delaying aircraft lease payments. Airline bankruptcies and collapses are expected, particularly if international air travel in ASEAN does not resume within the next few months. ASEAN airlines have a pressing need to rebuild revenue streams. Local economies dependent on tourism have also been hard-hit.
Bilateral green lanes and travel corridors, which allow for essential business travel, have been established between several countries. But such travel has been very limited due to restrictions and quotas.
The best hope for restoring international air travel in ASEAN is through the creation of bilateral travel bubbles under which personal and leisure travel is permitted without quarantine but with mutually recognised COVID-19 testing or vaccination records for all travellers. Air travel bubbles would enable short stays by replacing quarantine requirements with COVID-19 testing for all types of travellers. While there are not yet any travel bubbles between ASEAN countries, several ASEAN countries have mentioned they are under consideration for possible implementation in early 2021.
Air travel bubbles (ATBs) within ASEAN could follow the framework that was agreed to in October by Singapore and Hong Kong. Hong Kong and Singapore has delayed the start of their ATB, which was initially slated to be implemented on 22 November, due to a new wave of COVID-19 cases in Hong Kong. However, Hong Kong and Singapore still plan to implement the ATB once conditions improve. Despite this setback, the Hong Kong-Singapore ATB could become a model for other ATBs in Asia Pacific, including within ASEAN.
The Hong Kong-Singapore ATB agreement included no restrictions on travel purpose, no requirement for a controlled itinerary, no quarantine or stay-home notices at either end of the journey, mutually recognised COVID-19 polymerase chain reaction (PCR) tests; and dedicated flights, which make it impossible for transit passengers originating in other countries to fly on the same aircraft as the passengers travelling under the ATB. The Hong Kong agreement specifies a suspension of the ATB for 14 days if the number of untraceable COVID-19 infections exceed five on a seven-day moving average. This requirement triggered the decision by Hong Kong and Singapore to delay starting their ATB and is an indication that the agreement has succeeded rather than failed.
The ideal scenario would be for all ASEAN countries to agree to a similar ATB framework. That does not mean every ASEAN country would implement an ATB with all other ASEAN countries at once. Any ATB would only be implementable and maintainable if the number of infections remains low. An ASEAN-wide ATB would enable a partial resumption of travel within ASEAN, limited to countries that do not have many untraceable infections, on a safe and managed basis until the end of the pandemic.
It is not realistic to wait for a vaccination before resuming international air travel as it will take at least several months – and possibly years – for a vaccination to be distributed throughout the region. ATBs represent a platform to support a partial recovery of the intra-ASEAN air transport market in 2021 and could remain in place after vaccines begin to be distributed. Mutual recognition of vaccinations would be required, replacing COVID-19 tests for those passengers already vaccinated.
Without at least a partial reopening of borders, which would be possible through air travel bubbles or other mechanisms, international passenger traffic within ASEAN will remain at its current uneconomic levels for at least several more months.
The ASEAN Secretariat, in its role to promote international collaboration, has adopted the ASEAN Comprehensive Recovery Framework (ACRF) and agreed “to take steps towards the establishment of an ASEAN travel corridor arrangement framework to facilitate essential business travels among ASEAN Member States, while prioritising public health safety”. The ASEAN Secretariat also began pursuing in November an ASEAN Travel Corridor Arrangement for potential implementation in early 2021. However, this proposed arrangement is currently limited to essential travel and is similar to the green lanes or travel corridors already in place between several Asian countries.
Travel corridors and green lanes have not had a significant impact on passenger traffic. This is due to their limitations, which prohibit any form of leisure travel or tourism, and the quotas capping the number of travellers that are imposed. A resumption of leisure travel within ASEAN would be needed to restore ASEAN’s aviation industry and overall economy.
It is the recommendation of this white paper that, in addition to travel corridors, which permit only essential travel, ASEAN should consider establishing a framework for intra-ASEAN air travel bubbles.
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