With the air travel industry hit hard by the Covid-19 pandemic and with higher than average increases in ticket prices, it’s unsurprising that the airline industry is facing its biggest challenge in two decades. Previously, it was the Sept 11,2001, terror attacks in the United States that changed the landscape of air travel and put the tourism industry into a tailspin.
The International Air Transport Association (IATA) in April 2020 stated that its 290 member carriers were heading for a combined historic net loss of more than US$84bil (RM358bil) in 2020 as a consequence of the impact of the coronavirus pandemic and the concomitant movement restrictions and lockdowns. As for Malaysia, the air passenger industry could see a 39% fall in demand, involving an estimated 25.49 million passengers. IATA said the country’s airline industry faces an estimated RM14.4bil loss in revenue, affecting some 169,700 jobs. Malaysia Airports reported a staggering 97.8% contraction in passenger traffic movements in May of this year compared with the same period last year. Internationally, the decline was 99.3% whereas the domestic sector shrank by 96.4%.
Basically, there are two scenarios here. The first is the pessimistic view which posits the recovery of the airline industry as uncertain and not guaranteed. The data highlighted above would seem to preclude a quick turnaround and, therefore, recovery will take a long time to set in. The second is the optimistic view whereby the future of the airline industry is tied to the duration of pandemic, signalling a new dawn for the sector with SOPs such as social distancing that could be relaxed or even abandoned altogether once a vaccine or drug is ready for use.
In fact, there are already signs that the optimistic view is taking place: recovery is well on the way, albeit rather gradually, driven mainly by short-haul flights to closer destinations. The recovery movement control order (MCO) period has been pivotal in this regard. According to group CEO of Malaysia Airports, Mohd Shukrie Mohd Salleh, since the recovery MCO period began, the average number of daily flights, including to international destinations, has increased from 97 to 122 – an increase of 15%.
Arguably, the optimistic view is the more realistic since the pandemic has not destroyed but merely temporarily disrupted globalisation and caused a halt to travelling beyond national borders. In fact, although a rebound is not in view in the short-term on the one hand, allowing a meltdown in air travel is inconceivable on the other, what with all the economic, commercial, financial and social implications.
Going forward and beyond domestic air travel, our government has broached the topic of reopening the airline industry via green corridors or bubbles – ie, allowing travel to countries that are considered safe. This refers to reciprocal lanes or routes to and from countries that have more or less contained the Covid-19 outbreak successfully and are ready to open up their borders again. For a start, Malaysia is pushing for the resumption of intra-Asean travel.
At an online forum organised by the Federation of Asean Travel Associations on June 20,2020, Tourism, Arts and Culture Ministry secretary-general Noor Zari Hamat said that “there is a need to focus on intra-Asean travel, as international tourism from medium and long-haul destination markets would take a longer time to recover”. He believes “intra-Asean is the best bet for the region to restart the tourism industry post-Covid-19”. Reverting back to normalcy and easing travel restrictions would then, like a centrifugal force, progressively push outwards to the next orbit and outer layer, eg, the wider Asia-Pacific region (such as East Asia and Australasia) and so on.
Of course, this requires consensus, and within the context and framework of the green bubble, Singapore for one is currently against full resumption and is opting for a step-by-step approach. Resolving such an impasse would require compromises and resolve on all sides and a common Asean protocol which is crucial for also preparing for the possibility of future pandemics. This means a move towards a virtual (which is not the same as unhindered) free movement of people that is facilitated by digitalisation in tandem or parallel with the deployment of electronic customs.
What this means is there must be some sort of protocol convergence within Asean for intra-regional travel driven by digital technologies such as the Internet of Things (IoT), artificial intelligence (AI), big data, and even blockchain or distributed ledger technology. A regional database of air passengers that is seamless and readily connected to track and trace apps and easily accessible by the relevant players in the air travel industry would be required. Biometric and fingerprinting ID and RFID (radio frequency identification) embedded in tickets, for example, should be introduced and promoted.
In short, easing movement and travel restrictions – domestically and beyond – should be accompanied by a level playing field for all countries and players involved as enabled by digital technology.
Note: The letter writer is head of Social, Law & Human Rights at independent policy think tank Emir Research.
Did you find this article insightful?
75% readers found this article insightful