Thursday , October 22 2020

Singapore-HK air fares jump 40% on ‘bubble’

Bloomberg

The cost of air tickets between two major Asian financial hubs jumped within 24 hours of Singapore and Hong Kong unveiling plans for a travel bubble that wouldn’t require people to quarantine upon arrival.
The cheapest price for a Singapore Airlines Ltd return economy seat to Hong Kong was S$558 ($410) up until the end of December, versus around S$400 as the news was announced, the airline’s website showed. Return business-class fares rose about HK$5,000 ($645) to HK$19,000. Cheaper flights were still available on travel websites including Skyscanner Ltd.
The coronavirus pandemic has hit the flag carriers of Singapore and Hong Kong especially hard because they don’t have any domestic market
to fall back on. Prior to the Covid-19 outbreak, around 1 million trips were made between the two regional centers every year, data from the Singapore and Hong Kong tourism boards show.
Hong Kong-listed Cathay Pacific Airways closed up 6.1% and rose 6.4% last week as investors digested the news. The agreement could lift Cathay’s monthly revenue by HK$90 million and reduce cash burn by as much as 6%, according to Bloomberg Intelligence analysts James Teo and Chris Muckensturm, who assume revenue
on the Hong Kong-Singapore route amounted to about 3% of Cathay’s total pre-pandemic.

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