Transport Minister Ong Ye Kung set out the way forward for Singapore’s aviation industry, which suffered severe setbacks due to the COVID-19 pandemic, in a ministerial statement in Parliament on Tuesday (6 Oct).
Asserting that it is not just the aviation industry but also Singapore’s relevance that is at stake given how integral air travel is to Singapore’s status as a business and tourism hub, Mr Ong detailed the Government’s plans to help the aviation sector recover and emerge from the coronavirus pandemic. Read his speech in full here:
“Mr Speaker Sir, as the COVID-19 virus spread around the world earlier this year, many countries closed their borders. It was a drastic and unprecedented measure. But faced with an unknown and dangerous virus, Governments around the world concluded that this was the best way to stave off a viral invasion. Singapore did the same on 24 March 2020 this year.
Our Lifeline is Affected
This has decimated air travel. Today, we have fewer passengers than when we first opened Changi Airport Terminal 1 in 1981 – we have gone back more than 40 years because of COVID-19.
It also affected many other sectors, aerospace, tourism, hospitality, entertainment, attractions, retail, our taxi and private-hire car drivers.
But what is most worrying is the longer-term impact on our entire economy. Our aviation hub status is essential, even existential, to the health of the Singapore economy, to our jobs and our future.
I have described our airport as a lung of Singapore. Just as a lung takes in oxygen and vitalises every part of the human body, the airport connects Singapore with the outside world, and energises every sector of our economy.
When a company puts a significant investment in Singapore, one key reason for them to do that is our superior air connectivity, because that means their customers, suppliers, partners and key executives, they can travel in and out of Singapore easily. They can come in from any part of the world, come to Singapore and then connect on to another part of the world. Our status as an air hub makes that possible.
However, the longer our borders remain closed, the greater the risk of losing our air hub status, and our attractiveness as a place to invest, and to create jobs because of those investments.
The status quo is therefore not sustainable for us. We cannot just wait around for a vaccine, which may take a year or two before it becomes widely available. Even then, we do not know if the vaccine will work as expected.
We need to take proactive steps to revive the Changi Air Hub, as a top national priority. Mr Saktiandi and Mr Melvin Yong asked how we would achieve that. Mr Gan Thiam Poh asked a similar question for the next sitting which I will answer today.
Today I will first give an update on the current situation in the aviation sector. Second, I will explain what has changed from the time we closed our borders in March 2020 until now, and third finally, what are the steps we will take to revive our air hub.
But let me first give the House an update of the current situation:
• Compared to pre-COVID-19, Changi Airport is serving 1.5% of our usual passenger volume; and 6% of the usual number of passenger flights. The numbers are stark because Singapore has no domestic air travel.
• If we include cargo flights, it is higher, at 17% of total flight volume. This is because we are flying more than two and a half times more cargo flights now, which partially offsets the reduction in passenger flights; So all the online buying of goods have contributed to cargo, and allowed us to mount more flights.
• We now have direct flights to 49 cities in the world, compared to pre-COVID-19 of 160;
We were the 7th busiest airport in the world for international passenger traffic. Today, we have dropped to 58th place; Two key companies in the aviation sector are facing a deep crisis. They are Singapore Airlines (SIA) and Changi Airport Group (CAG).
SIA recorded its largest-ever quarterly loss on record in 1Q of this year, 2020. It is trying its best to reduce cash burn, preserve core capabilities, and explore all ways to generate revenue.
Unfortunately, the SIA Group had to make the difficult decision to rationalise its workforce. 1,900 jobs have been rationalised through open vacancies that were not filled, early retirement and voluntary release scheme.
The recent concluded agreement with SIA’s pilot union, for pilots to take deeper salary cuts, enabled SIA Group to reduce the number of retrenchments from 2,400 to 2,000. So, all in all, it is about 3,900 jobs rationalised either through non-filling of vacancies, early retirement or retrenchments in the SIA Group – 3,900 jobs.
Without the recent major recapitalisation exercise, there would not be an SIA today. But it is far from being out of the woods.
One of the initiatives SIA considered recently to generate some revenue and get more pilots to do actual flying, was a flight to nowhere. Mr Dennis Tan and Assoc Prof Jamus Lim asked if MOT would support this.
It has now become a moot point, because SIA has decided to scrap the idea.
Whichever way SIA had decided, MOT would always try our best to support our national carrier in times like this. But what I will not contemplate is to impose on them an environment tax at this time, as Assoc Prof Jamus Lim indicated in his question because that will just worsen the crisis for SIA.
Changi Airport Group
CAG too has lost its revenue streams. With low passenger volume and flights, the amount of service charges it is collecting from airlines and passengers is miniscule. Shops and restaurants at the airport are seeing far fewer customers; many shops have closed. CAG is also dipping into its reserves, while preserving cash and retaining its core capabilities.
Mr Liang Eng Hwa asked about the plan for Terminal 5 (T5). And this is a very large-scale project undertaken by CAG. Given the current situation, we have decided to take a two-year pause, so that we have more clarity on the pace of air travel recovery, before deciding how to proceed with the project.
The Government will continue to support SIA, CAG and other companies in the aviation sector as much as we can. This includes the Jobs Support Scheme, where the aviation sector benefits from the highest level of support. We have also provided cost relief through the Enhanced Aviation Support Package, and temporary redeployment programmes for workers affected.
But the most meaningful support we can give to our aviation companies is to restore passenger traffic and revive our air hub, in a safe, in a controlled manner.
Conditions Are Now Different
How do we do this? We must recognise that compared to six months ago, when we closed our borders, the situation has changed, in a few very significant ways.
Virus Under Control
First, the virus situation in Singapore, both in the community and in the foreign worker dormitories, is largely under control. The number of new cases in the community has remained stable at an average of 1 case per day in the last 2 weeks.
Thanks to the hard work of our healthcare staff, we have had no fatalities resulting from complications due to COVID-19 infection since mid-July; our fatality rate is also one of the lowest in the world. And thankfully, for many weeks now, we have not had any patients admitted to ICU due to COVID-19 infection or its complications.
Members have heard all these updates before, but I thought I would repeat them anyway, because this track record matters greatly to countries and regions seeking partners to restore aviation links.
Second major thing that has changed is testing capacity. COVID-19 testing capacity is no longer a major constraint. Back in March 2020, we could only conduct about 2,000 tests a day, and they had to be reserved for critical public health purposes, such as testing high-risk symptomatic individuals.
At that time, closing our borders was the only way to slow down the import of the virus and keep Singaporeans safe. For returning Singaporeans and residents, we subjected them to a lengthy 14-day SHN and usually SHN plus – Stay Home Notice Plus, which means they stay in hotels, not home. So, this is a lengthy 14-day SHN Plus implemented by Minister Gan to ensure that they were free from the virus, before allowing them to mingle with the rest of the community.
Today, we test more than 27,000 individuals daily, from 2,000 in March to 27,000 daily today, using diagnostic polymerase chain reaction (PCR) tests, and we are on track to increase our testing capacity to 40,000 tests a day by November 2020. To give this a further boost, we will also be leveraging the private sector to develop commercial testing capacity.
At the same time, testing technology is advancing. There are now promising tests with quicker turnarounds while maintaining acceptable test sensitivity.
For example, DSO and A*STAR have developed the Resolute test kit. It halves the time needed to process and analyse patient samples in the lab, from two and half hours, to one to one and a half hours.
There are also trials for less intrusive tests say using deep throat saliva, and efforts to develop rapid test kits, such as antigen and breathalyser tests, that can deliver results on the spot in a few minutes, without having to send samples to a laboratory for processing. We are watching this space very carefully and with great interest, and we will deploy them where practicable.
Part of this increased capacity will be allocated to test air passengers.
With high-sensitivity tests, we can now filter out the virus at the border, better still before the traveller boards the plane, and significantly mitigate the risk of importing and spreading the virus in Singapore. In other words, on a selective basis, we can open up our borders do away with SHN, which is a big deterrent to travel, and replace SHN with tests.
Testing is therefore the key to unlock air travel. With COVID-19 around for a while, the emerging international practice is to get tested before travel, no different from us going through security and having our bags checked, before boarding a plane, and that is the emerging international practice.
Changi Airport has already set up a facility to swab up to 10,000 passengers a day, as a start. And with some notice, they can ramp up the numbers quite readily. In the next few months, we plan to set up at Changi Airport, a dedicated COVID-19 testing laboratory, to support aviation recovery.
A third key change since March is tracing capability. We have scaled up our ability to quickly identify and isolate new cases and their close contacts. When we had our first COVID-19 case in January, we relied entirely on human contact tracers to manually retrace a patient’s steps.
Today, technologies such as SafeEntry, the TraceTogether app and tokens, complement the work of human contact tracers. We can therefore quickly identify and isolate people who have come into contact with a confirmed patient. And this helps to reduce the risk of any community outbreak.
More Like-Minded Partners
Finally, because of all these developments, internationally, there is now a desire to cautiously and steadily open up air travel again.
For example, the European Union has designated countries whose residents can visit Europe 2. The United Kingdom has recently exempted travellers from Singapore from their 14-day quarantine when you arrive. Vietnam is restoring scheduled passenger flights to several cities. Hong Kong has announced its intention to negotiate travel bubble arrangements with several countries, including Singapore.
The Journey Ahead
Mr Speaker Sir, having described the situation, what has changed, let me now talk about the steps we will take to open up our borders and revive air travel.
The key is to make sure we stay safe, can manage the risks while we open up aviation. We have gone through quite a bit, including a painful Circuit Breaker, to arrive at the stable situation today. And we must not give that up.
We have seen how a second wave has broken out in other countries, in some cities and countries, they have gone back into lockdown again, and we should learn from those experiences.
Air hubs such as Dubai in the United Arab Emirates, and Istanbul in Turkey, they have restored flights quite quickly, Now they are at about 30% of pre-COVID-19 volumes. Earlier, I mentioned we are at 1.5%.
As of 5 October 2020, the United Arab Emirates had an infection incidence rate of about nine per 100,000 population per day, and Turkey about two per 100,000 population per day. Singapore, we are at 0.1 per 100,000 population per day.
I think there is a recovery and risk trade-off, and we can learn from one another in managing the risks of opening-up. But as I just described, because conditions have changed over the past months, the trade-off is not as stark as before.
I need to manage expectations here. For Members who are hoping that I am about to announce some air travel resumption and possible December holiday destinations, I am sorry I will disappoint you.
The fact is that borders are still closed for most parts of the world. Some countries such as Germany only allow business travellers from Singapore, and to the best of my knowledge, only a handful of countries US, UK Turkey, Maldives allow general travellers from Singapore.
We cannot control what other countries want to do with their borders. But we can control ours, to welcome back visitors, bring back jobs, and revive our air hub safely. And how we do this safely, can be a useful reference point for other countries. And perhaps catalyse some safe openings around the world.
The coming months will be crucial. It will be a difficult and gradual climb out of a very deep abyss. But climb we must. And we will do the following:
Reciprocal Green Lane
First, we will continue to pursue Reciprocal Green Lane arrangements with partner countries or regions. These are restricted to a small group of essential business and official travellers. They will be subjected to pre-departure and on-arrival tests to ensure that they do not carry the virus. Further, they will have controlled itineraries to minimise any residual risk of community spread.
The Ministry of Foreign Affairs has led this inter-agency effort and concluded arrangements with Brunei, China, Japan, Malaysia, and the Republic of Korea.
Second, we will continue to facilitate transfers at Changi Airport. As an air hub, about a quarter of our passenger volume at Changi are transfers, meaning the passengers do not clear immigration and are using Changi Airport as an interchange to get to their final destinations.
Mr Gan Thiam Poh asked for the number of such transfer passengers at Changi Airport today. Since June, about 27,000 passengers transferred safely through Singapore.
On a weekly basis, we are now serving about 2,500 transfer passengers, and we expect the numbers to rise steadily. But this is still a small fraction of what we used to serve. We have put in place robust safeguards and no Singaporean has become ill as a result of these transfers.
Lift Border Restrictions Unilaterally
Third thing we will do, we should be prepared to lift our border restrictions to countries and regions with comprehensive public health surveillance systems, and comparable incidence rates to Singapore. That means we are of the same risk so far, which is low. We already know who they are. At the same time, we will also lift our travel advisory for Singapore residents travelling to these regions.
Purely from an infection risk point of view, the risk of a traveller from these places carrying the virus when they arrive at Changi Airport, is no higher than that of a Singapore resident coming from Jurong or Sembawang. Because we are of the same incidence rate, same risk profile. But as a precaution, we will subject these travellers to a COVID-19 test, to ensure they are free from the virus.
In this way, we can safely lift our border restrictions for these countries and regions, and welcome their travellers. Their Governments will decide if and when to reciprocate for travellers from Singapore. Once they do that, aviation links between us would have been restored. There is no need for lengthy bilateral negotiations.
We have already taken the first steps. We opened up to travellers from Brunei and New Zealand last month, and more recently in fact last week, from Australia (ex-Victoria) and Vietnam. We do not expect big numbers in the short term, because these countries currently discourage or restrict travel for their residents.
But notwithstanding this, such unilateral opening is still meaningful, because it is like a standing invitation. Although the other countries are not ready to lift their restrictions now, Singapore can be top of mind when they are ready eventually.
Let me give you an example. The UK. Recently it unilaterally allows Singaporeans to travel there, without a quarantine. So many of our students actually went to the universities as a result.
At present, the UK’s incidence rate is quite high, so we still have a travel advisory against Singapore residents travelling to the UK, and we are also not ready to allow travellers from the UK to enter freely into Singapore. But we appreciate the UK’s standing invitation. So, once their infection rate falls and becomes comparable to ours, we will likely lift restrictions quickly, which will effectively restore air travel between our countries.
Remember that we are small. Our domestic market is not a big bargaining chip. Instead, what we need to have, is a mindset of generosity, required of a hub.
It is why when we were building up Changi Airport in the 1980s, we opened up our skies unilaterally. It is also why decades ago, we removed tariffs unilaterally for all countries. And yet many countries chose to negotiate with us for Air Services Agreements and Free Trade Agreements.
Because our partners know that by connecting to Singapore, they connect with the rest of the world. They chose to deal with Singapore because it is strategic to do so.
Air Travel Bubbles
Fourth thing we would do, for these safe countries or regions, we will also negotiate Air Travel Bubbles with them, or pursue such ATBs with them. Air Travel Bubbles are not the same as Reciprocal Green Lanes, which are for official and essential business travel. Air Travel Bubbles are for general travellers and have no requirements for a controlled itinerary.
While we should establish ATBs with only safe countries and regions, we can further manage risks by setting a quota on the number of travellers per day and ensure that everyone abides by COVID-19 test protocol.
We also require travellers to apply for an Air Travel Pass before their journeys, to allow us to plan for their arrivals, and if need be throttle down the numbers, reduce the quota if the epidemic situation changes.
Hong Kong has publicly announced its intention to establish ATBs with several countries, including Singapore, and we have responded positively. We hope to commence discussions with Hong Kong and other partners soon.
And finally, we will not stop at these modes of opening our borders, that I just talked about. The Multi-Ministry Taskforce will explore other practical schemes. And this is especially important for travellers from countries which are economically important to us, but with higher infection rates.
There are ways to facilitate these travellers to come to Singapore while managing the risk of virus transmission. Many stakeholders and members of the public have written to us with very well thought-through and sensible ideas, and we are studying them carefully.
In particular, we recognise that the requirement of having to serve a full 14-day SHN in a hotel, will deter most travellers from wanting to come to Singapore.
So, we have to facilitate the visits without such an onerous restriction. For example, we can replace the 14-day SHN in a hotel with new requirements, such as a more stringent and a repeated test protocol (arrival, 3 days later, 5 days later, 7 days later – we will study that) , segregation from the rest of the community (a process we call, ‘bubble wrapping’), and we can closely track of their movements while they are here.
This will benefit not just business travellers important to our economy, but a range of people who need to come to Singapore for various purposes, such as compassionate reasons or to re-unite with a long-separated partner.
The message we want to send to the world is this – Singapore has started to re-open its borders. In the near future, if you have the virus under control and infection rates are as low as Singapore’s, you are welcome to visit us, but travellers will be subject to a COVID-19 test, as a precaution.
If you are from a place where infection rates are higher than Singapore, you can also visit us, so long as you agree to conditions such as testing, segregation and contact-tracing. The Taskforce will be studying these approaches and developing the schemes.
Mr Speaker Sir, let me conclude.
Earlier in the year, we had to close our borders to keep Singaporeans safe. But as we learn to control the virus, and testing becomes much less of a constraint, the trade-off between health and economic needs, between lives and livelihoods, is no longer so stark, and the two do not have to be at odds.
Eventually, when there is a widely available and effective vaccine, air travel will resume. But in the meantime, we will have to learn to live with the virus – taking sensible precautions, while earning a living, and keeping hopes for our future alive.
We have opened up safely before. We did that when we emerged from the Circuit Breaker in June, and we have been bringing back our community and social life, step by step. We have been restoring school life for our children, activity by activity, and made sure throughout that process that our children did not lose their school year.
So we did not rush, but neither did we baulk at what we need to do to regain our normal lives and livelihoods.
It will be the same with our international borders, to open up step-by-step, carefully, safely, steadily.
What is at stake is not just hundreds of thousands of jobs, but our status as an air hub, Singapore’s relevance to the world, our economic survival, and in turn, our ability to determine our own future.
When Terminal 1 opened in 1981, it opened up a whole new world and brought prosperity undreamt of in generations past. Today, the skies remain key to our economic survival. We must open up slowly, carefully, and holding each other accountable for our collective safety. But open up we must.
I hope to have the support of all Members of this House, and all Singaporeans, for this critical endeavour, so as to take our place in the world once again, and to start building our future as we once did. Thank you.”