<article><p class="lead">Singapore is considering setting up air travel bubbles with countries that are free of Covid-19, in an indication of how a two-tier air travel market could emerge in the region even as the global pandemic worsens.</p><p>The travel bubbles could allow arrivals from selected countries to enter Singapore without having to serve a mandatory two-week quarantine, although details are still unclear. Risks could be managed by putting quotas on the number of arrivals, regularly testing for Covid-19 and restricting or closely tracking movements, transport minister Ong Ye Kung said this week.</p><p>Singapore hopes to start discussions with the Chinese territory of Hong Kong and other countries soon, Ong said. Hong Kong has already announced its intention to establish air travel bubbles with several countries, including Singapore.</p><p>The travel bubbles would allow all types of passengers to arrive in Singapore without a controlled itinerary. Singapore has already set up reciprocal green lanes for essential and official travellers from Brunei, China, Japan, Malaysia and South Korea, although these require controlled itineraries. </p><p>Singapore appears to have brought its Covid-19 outbreak largely under control, with new daily infections in the single digits and less than 200 active cases as of yesterday. </p><p>The government has already opened the borders to travellers from countries with similarly low Covid-19 case numbers and strong public health surveillance systems, allowing arrivals from Brunei and New Zealand since last month and from Vietnam and Australia — excluding Victoria state — starting today. But these countries are still discouraging or restricting travel, limiting passenger numbers. Short-term visitors are banned from most countries, while most other arrivals must quarantine for 14 days at dedicated facilities.</p><p>Bilateral or regional travel bubbles were touted as a way of supporting the Asia-Pacific air travel sector earlier this year, before a resurgence of coronavirus cases in some countries including Singapore, Australia and New Zealand put paid to the idea. But Covid-19 case numbers have since declined across many parts of the region, albeit with major exceptions such as India, Indonesia and the Philippines.</p><p>Australia and New Zealand plan to resume some air travel between them <a href="https://direct.argusmedia.com/newsandanalysis/article/2146639">from 16 October</a>, while Japan may lift bans on travel to 12 countries next month, although the government is still discouraging non-urgent trips.</p><p>The plans are the latest attempt by Singapore to revive its aviation industry, which has been harder hit than some other countries because the city-state lacks a domestic travel sector. Singapore's Changi Airport handled just 84,300 passengers in August, 98.6pc less than a year earlier. Rival air travel hubs such as Dubai are operating at about 30pc of pre-Covid-19 levels, despite having a higher infection rate per capita, Ong said.</p><p>Asia-Pacific jet fuel refining margins, or fob Singapore jet fuel swaps against Dubai crude values, <a href="https://direct.argusmedia.com/newsandanalysis/article/2146230">turned positive</a> last week at $1.37/bl for the first time in nearly 1½ months. Margins were at $1.83/bl yesterday, still far below the average of $12.12/bl in January, before the pandemic took hold.</p><p>The return of jet fuel demand is <a href="https://direct.argusmedia.com/newsandanalysis/article/2141678">essential</a> if refiners are to increase run rates and guarantee their survival. Many refiners have already maxed out gasoil yields at the expense of jet fuel and will not be able to maintain this in the longer term.</p><p class="bylines">By Sarah Giam and Kevin Foster</p></article>
