Hopes of a late 2021 recovery “evaporate” for region’s airlines

August 1st 2021

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Even if plans for travel bubbles are on the shelf because of the new Delta variant in the ongoing pandemic, Asia-Pacific governments should be talking to each other to ensure coordinated health measures are in place when travel markets begin to open up. Read More »

That is the view of the region’s peak airline body, the Association of Asia Pacific Airlines (AAPA).

Persuading governments to agree to synchronized health measures is the “greatest impediment” to progress, AAPA director general, Subhas Menon, said. “That is where we are directing a lot of effort - to attempt to convince governments to make use of current down time to mutually agree harmonious measures for travel health protocols from vaccination to testing to quarantine,” he said.

While the International Civil Aviation Organization (ICAO) is planning a high-level conference towards the end of 2021 to seek clarity and co-ordination on health issues, Menon told Orient Aviation “we need to start thinking about it and talking to each other about it so we put things into motion”.

Historically it has been difficult for countries to concur on such issues so Menon advocates progress based on bilateral agreements. Each nation knows the countries they want as travel bubble partners, he said, “so you can start talking about the issues to make sure you have a recognition framework for testing centres and vaccination labs as well as certificates”. “All of these matters need to be worked out in the next few months. That is what we are talking to them about as well asking them to speed up these agreements,” Menon said.

In the meantime, airlines concede hopes of a beginning of an industry recovery by year-end have evaporated. “Everyone was looking forward to a recovery starting by the end of this year, but now it does not look like it because of low vaccination rates, especially among young people. They are the ones we rely on for the supply chain, for tourism, for businesses to expand beyond their national borders, but unfortunately this is not the case,” Menon said.

While 2020 has been confirmed as the worst year in the history of aviation, 2021 is proving to be worse than last year, he said. Nevertheless, airlines are a bit better off this year, he added. “Their losses have come down. Their costs have come down significantly and most airlines have restructured their debt or raised cash in capital markets backed by their shareholders and their governments,” he said.

“Having said that, they don’t have an indefinite amount of cash. It’s going to run out sooner or later if they can’t operate and earn enough money to cover their costs.”