(Bloomberg) — Singapore and Hong Kong will open their borders to one another for the first time in almost seven months, exempting people in both cities from compulsory quarantine in an agreement that will reinstate links between Asia’s two premier financial hubs.
Compulsory quarantine will be replaced by coronavirus testing, Singaporean Transport Minister Ong Ye Kung told reporters Thursday, and he hopes the bubble will start in “weeks.” Hong Kong’s commerce and economic development minister, Edward Yau, confirmed the pact, originally reported by the South China Morning Post, soon after.
Hong Kong-listed Cathay Pacific Airways Ltd. jumped as much as 7.8%, the most in more than seven weeks, before closing with a 6.1% gain. Shares of Singapore Airlines Ltd. rose 0.6%. Both carriers have been hit particularly hard by travel curbs and the drop in demand from the coronavirus pandemic because they don’t have a domestic market to fall back on.
“This is a milestone development for Hong Kong and an important first step in facilitating the resumption of regular air travel to and from our home hub,” Cathay’s Chief Customer and Commercial Officer, Ronald Lam, said in a statement.
A Singapore Airlines spokesperson said the agreement was an “important step in our recovery strategy.” “We strongly support all efforts by the Singapore government to open up the Singapore air hub in a safe
and gradual manner.”
Cathay’s shares jumped the most in over seven weeks on the news
Hong Kong’s Yau said business travelers will get priority in the initial stages of the travel bubble, the arrangements of which could be adjusted if the epidemic improves or worsens. Details of the agreement will be fleshed out in the coming weeks, the Hong Kong government said in a statement, without giving any date for when the plan will come into effect.
Travelers must have been in Hong Kong or Singapore for 14 days before departure and will need to take mutually recognized Covid-19 tests and require negative results. Neither side disclosed the cost of the tests.
“It’s a small step but a significant one because both Hong Kong and Singapore are regional aviation hubs,” Ong said. “For the two of us to be able to control the epidemic, to come together to discuss and establish this air travel bubble, hopefully sets a model for us to forge more such relationships and partnerships.”
Prior to Covid-19, about 1 million trips were made between the two regional hubs a year, according to the Singapore and Hong Kong’s tourism boards. The flight takes about four hours. Total trade between the two was about HK$362.7 billion last year, according to Hong Kong’s Census and Statistics Department.
Hong Kong closed itself off to non-residents in March and enforced strict measures after its outbreak worsened in July. Though new daily cases have dropped to single- or low double-digits, social distancing rules remain in place, including limiting social gatherings to four people. The city has reported 5,213 infections and 105 deaths. There were