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Writer's pictureSEIC
May 19, 20217 min read

Air Corridors and The Future of International Travel

Authors: Cliff Ng and Bharat (Dan) Gangwani

Region Head: Bharat (Dan) Gangwani

Editor: Sasthaa GB (Uday)


Abstract


The future of international travel looks uncertain. In a bid to partially open up economies and restore a semblance of the pre-COVID normal, many countries have chosen to establish air corridors with other countries. We begin by deconstructing the different air corridors that exist in the Asia Pacific region with an emphasis on Singapore. Consecutively, we address the question whether air corridors do more harm than good in terms of providing unequal access to international travel or would their absence lead to a graver outcome. Through our analysis, we use international travel data and differential health statistics across countries to conclude why the overall loss in access to international travel is more likely to be mitigated with air corridors than in a free-market framework.


Introduction


The future of international travel, plagued by conflicting opinions, hopes and stakeholder interests, is a contentious issue to say the least. At the beginning of the pandemic last year, restrictions on international travel helped curb the spread of cases and allowed many countries to keep them at manageable levels for their healthcare systems (Gwee et al., 2021). Today they remain a preventative measure adopted by countries to avoid contact with new strains. Given their effectiveness, the rise in new strains, and resurgence of cases in many countries, it’s unlikely that unrestricted international travel will be the norm again anytime soon.


The restrictions have made a significant hit on tourism hotspots, however. For instance, Singapore’s tourism receipts fell from S$27.7 billion in 2019 to S4.4 billion in Q1-Q3 2020 (Gwee et al., 2021). Hong Kong experienced a 96% drop in tourist arrivals in February 2020 after initiating its lockdowns (Suhartono & Turner, 2020). To mitigate these consequences, many countries have resorted to opening air corridors, hoping to encourage business activity and cultural exchange. Air corridors are agreements between two countries to open one-way or two-way travel for different groups residing in the two countries. Countries can decide which groups get to travel based on the purpose of travel, citizenship of the travellers or any other relevant criteria like vaccination status.


Data collected by CEIC (2021) suggests air corridors do facilitate increased inter-country economic and cultural exchange, especially considering that the alternative is prohibitively higher costs of travel for a lot of people. They are primarily established between developed countries, however, which raises severe equity considerations in global politics. That being said, international travel facilitated by air corridors would likely be a more equitable outcome than allowing unrestricted international travel in a free market framework.


Air Corridors in the Asia Pacific


Singapore is party to many air corridor agreements in the Asia Pacific. In fact, Singapore maintains the most extensive network of air corridors, with a passenger movement of at least 24,500 in 2020 despite lockdowns (Traffic Statistics | Changi Airport Group, n.d.). Indonesia is in second place, restricting travel only to permanent and temporary residents, business travellers and diplomats.


Singapore is staying relatively open compared to other countries in this period by having multiple types of air corridors for travellers to enter the country. Some of the different types of air corridors include the Air Travel Passes, Reciprocal Green Lanes as well as Connect@Singapore. A short description of each type is provided in Figure 1.

Figure 1: Description of Singapore’s Different Air Travel Corridors


Singapore is also looking to relax its restrictions by committing to an Air Corridor with HongKong, which was delayed as HongKong’s seven day average of new infections surged. The air corridor between the two countries is still very possible and continues being discussed (Kanis Leung, 2021).


Why are they so bad?


Until comprehensive vaccination is achieved, it appears that air corridors are the most effective remedy and hence here to stay. However, they might deepen pre-existing inequalities within and across national borders. Air corridors are formed between countries who are more successful in their fight against COVID-19, and more often than not, between two developed countries as they have better healthcare facilities and resources to aid them in containing the virus. Such a sample selection mechanism will lead to a network of air corridors among developed countries, excluding developing countries which will miss the economic benefits that arise from an open economy including tourism, higher trade, business and cultural exchange. The post-COVID status quo would involve a worsening of the socioeconomic disparities between developed and developing countries.


However, this may not always be true. Many developing countries are also doing well in their fight against COVID-19. This allows them to be considered as viable options for the establishment of air corridors by other countries. An example of such a country in the Asia Pacific would be Vietnam. Vietnam emphasised the use of 4 layer-deep contact tracing and mass media messaging to ensure higher than expected COVID-19 health outcomes within their borders and preventing excessive pressure on their healthcare system (Dabla-Norris et al., 2020). At the time of this article’s publication, Vietnam’s seven day average of new infections was at 5 (Roser et al., 2020), fulfilling the criteria that a Singapore-HK air corridor would need to fill. This suggests that developing countries are also capable of keeping new infection numbers low and become reliable parties to air corridors, mitigating the disparities that the selection mechanism for the creation of air corridors would create.


The creation of different air corridors for different passengers may also lead to the establishment of tiers of travel sanctions by legislation and bureaucracy rather than private markets. Diplomats and entrepreneurs would get special access passes like the RGL in Singapore while short term visitors incur increased expenditure for the opportunity to travel. This’d suggest that even in a country with an extensive air corridor network, the middle to low income citizens would still be deprived of the opportunity to travel. Hence, the establishment of air corridors as the new norm for international travel is likely to contribute to both inter and intra national disparities.


Why do we need them? A Defence.


Despite all their drawbacks, it's crucial to recognise that a lack of air corridors does not benefit the situation. Allowing market forces to decide the rules for international travel in the new normal in a laissez-faire framework with minimal restrictions in place on social distancing, masks and safety guidelines will likely lead to similar if not greater levels of inequality as the establishment of air-corridors.


The international travel market is unlikely to equilibrate at pre-COVID levels. The higher costs incurred by companies on social distancing measures between seats and waiting areas in airports and increased time between flights to allow for temperature and health screenings will make the cheap, unluxurious flight model implausible in the post-COVID norm. The higher prices are likely to be prohibitive for a lot of people. The mandatory-quarantine measures imposed upon arrival by many receiving countries like Singapore, Thailand and Indonesia will also pose new costs to be borne by travellers. The combination of these forces will lead to a significant decline in access to international travel for a lot of people.


Establishment of air corridors can become a viable means for countries that have been successful at keeping cases at bay to mitigate or negate a lot of these costs by avoiding the need for quarantine or allowing a higher number of passengers per flight.Countries like Estonia and Seychelles have started accepting vaccinated international travellers and eliminated all quarantine requirements for them (Pitrelli, 2021). Other countries like Greece and Thailand are soon to follow.


However, not only are citizens from developed countries more likely to be vaccinated due to easier access (Julia Belluz, 2021), wealthier individuals from developing countries can secure vaccines more easily or fly out to get themselves inoculated (Shiryaevskaya, 2021), gaining access to international travel before other citizens of their country. While this would be a possibility despite the establishment of air corridors, the non-existence of air corridors would also make travel inaccessible for the economically weaker citizens from developing countries which have been effective at curtailing cases.


Conclusion


The comparative between greater international travel with air corridors and without has shed light on the fact that private selection mechanisms based on wealth and political prowess are likely to play a part in either case. However, air corridors - due to their mitigation of travel costs and relatively universalistic standards - are likely to be the more equitable approach between the two.


If equality in access to travel opportunities is a priority for a society then it’d have to invest heavily in comprehensive vaccination of its citizens to either achieve herd immunity or at least a steady rate of cases. However, the excessive costs involved, combined with the delays in the supply pipeline, mean that most developing countries will finish mass vaccination by 2022 or 2023, which makes equal travel access an implausible outcome for many countries (‘Vaccine Nationalism Means That Poor Countries Will Be Left Behind’, 2021).


Given the situation, expansion of travel corridors appears to be the best policy-approach, facilitating business, trade and small-scale tourism, despite the inequalities it may foster.



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