A Possible SEA Travel Bubble After Indonesia-Malaysia Deal

With vaccination programs now underway, the aviation industry is looking forward to having a possible SEA travel bubble. Indonesia and Malaysia had a reciprocal green lane/travel corridor arrangement (RGL/TCA) after Malaysian PM Tan Sri Muhyiddin Yassin finished his two-day visit to Indonesia.

Malaysia Airport group CEO Datuk Mohd Shukrie hopes airport employees will be among the first to receive the COVID19 vaccine. He believes that this could help improve passenger confidence to travel again. This could provide a “high safety standard at the airport” that would allow people to travel safely. Shukrie also mentioned that half of international traffic came from the South East Asian region before the pandemic.

Impact on Southeast Asia’s Aviation Industry

Southeast Asian aviation industry was a booming industry before the pandemic. The region attracted both local and international tourists thanks to its scenic tourist attractions and cheap flights.

By 2020, Southeast Asia’s aviation industry experienced the pandemic’s economic fallout. Flight restrictions and lockdowns resulted in losses. Malaysia Airlines reported a $3.32 billion loss while Thailand’s National carrier, Thai Airways reported a $564 million loss in the first six months of 2020.

Budget airlines also experienced steep losses. It was reported that Cebu Pacific, one of the Philippines’ budget airlines, experienced a $139 million loss in the third quarter of 2020 alone.

Could a SEA Travel Bubble Save the Aviation Industry?

Malaysia airport passenger traffic movements in January 2021 were down by 30% compared to December 2020. Recent re-imposition of travel restrictions slowed down air travel after a 240% increase from November 2020 to December 2020.

With RGL/TCA in place, it is also possible to see more bubbles between Southeast Asian countries soon.

Other industries are also optimistic about this new development. Malaysian Association of Convention and Exhibition Organizers and Suppliers president Francis Teo believes that it could potentially re-open the business events industry. Teo mentioned that airports should look into providing special lanes and counters dedicated to these travelers.