Asian airlines rush to restore routes as air travel recovers from Covid

Ahead of the year-end travel season, Asian airlines are ramping up flight options in a battle to board flyers, with air travel continuing to recover as Covid concerns remain largely downgraded. From Singapore to Japan, carriers have raced to restore routes less well served during the height of pandemic-related border restrictions, with new partnerships now being formed to capture travel demand. The unwinding of zero-Covid policies in China may gradually spur air travel as well. But analysts and industry groups note that regional airlines are closely monitoring rising fuel prices and interest rates, as economic uncertainties could dampen earnings while airlines are grappling with a gradual recovery. Shukor Yusof of Endau Analytics said that “both [factors] will determine if an airline can raise capacity without hurting its balance sheet”. He added that “financially strong airlines” like Singapore Airlines (SIA) would have the capacity to increase flight frequencies and new destinations if demand stays firm. For example, SIA and India’s Tata Sons announced in November the merging of Air India and Vistara, with SIA investing $250mn in Air India as part of the deal. This would give Singapore’s flagship carrier a 25.1% stake in a bigger Air India group. The merger is slated for completion by March 2024, clearing the skies for the airline to bolster its presence in the fiercely competitive south Asian travel market. SIA noted that Tata’s Air India has “valuable slots and air traffic rights” at domestic and international airports that are not available to Vistara, a joint venture between SIA and Tata launched in 2015. “We have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market,” SIA’s CE Goh Choon Phong said in November. “We will work together to support Air India’s transformation programme and unlock its significant potential,” Goh said.<br/>