Below is the transcript of a First On CNBC interview with Ong Ye Kung, Minister for Transport, Singapore. If you choose to use anything, please attribute to CNBC, Sri Jegarajah and Martin Soong.
Sri Jegarajah (SJ): Let’s talk more about this with Ong Ye Kung, Singapore’s Minister for Transport. Minister, thank you very much indeed for joining us this morning. So Indonesia and Singapore have confirmed the green lane agreement – to what extent will this and the other travel corridors drive a return to business volumes, business travel volumes?
Ong Ye Kung (OYK): I think green lane keeps the essential business dealings going. It is quite restrictive. You’ve got to apply for permission first to travel, go through a testing protocol. Itineraries are usually controlled. So it’s quite a tight scheme just to keep essential businesses going it, in no way I believe, will this revive the aviation sector. To revive the aviation sector, you’ve got to go beyond the lane or corridor – create a bubble where general travel can happen that you change the default. I think the key thing is that the default, under current green lane arrangement, the default is you can’t travel, there’s no landing policy. And so you apply to get the permission to travel. But I think we need to look at between safe countries how we form a bubble, where you change the default such that you can travel, you don’t have to ask for permission. But you have to abide by certain conditions, namely testing, there will be a testing protocol. And when you arrive. I think scientists are looking at post-arrival testing, third day testing, fifth day testing, maybe 11-day testing. In the case of Singapore when our scientists look at the numbers 11-day testing seems to be very effective. So we need to start putting in place such protocol, but most importantly is countries which kept the epidemic under control must be prepared to come together and form such a travel route.
SJ: Minister, do you believe that it’s only really going to be an effective global vaccine that will get us back to anything approaching pre-COVID levels in travel? And that implies getting a mass market, getting tourism back?
OYK: Absolutely. I think vaccine is critical. It’ll be a big turning point when that happens. But even so there’s quite a bit of uncertainty. You don’t know in vaccine, how long it will take. It may take a year, it may take two, before it becomes widely available and people can get vaccinated. And secondly, we also are not sure how well it will work. Does it work as promised? Does it last a lifetime, does it love, six months or does it last 10 years. But bottom line is this. We can’t wait around for a vaccine. the aviation industry critical to so many economies, particularly a small one like Singapore that we need all these connections in order to be economically viable. We can’t wait around for a vaccine, we got to start doing something, active steps. And the fact is that there are, we can open up safely. Because there are countries, regions, that have kept the epidemic under control. And testing, is no longer a constraint. Imagine earlier part of the year when we first saw the virus, we could do 2,000 tests a day. And we reserve it mostly for the hospital for acute cases, diagnostic purposes. But today we do longer have that constraint. We are on track to achieving 40,000 tests per day by November. And if we can devote a good part of this for travel, I think we have the tools to revive air travel at least among safe countries and regions.
Martin Soong (MS): Minister, testing, you believe that really is the key because actual travel on board an aircraft for however long that has actually been proven, at least by some statistic to be quite safe. Do you agree? Do you agree with that view?
OYK: While we look at evidence, everything we got to look at evidence and scientific data so far, it does show that there is no evidence to say that there’s transmission on transport vehicles, you know, whether it’s a train or a plane, we know that the virus transmitted via super spreader events and settings. And the three V’s are easy to remember. One is the venue – it is an enclosed venue. Second what’s the ventilation like, as the air keeps flowing within itself and there’s no circulation of air. And third and most importantly probably, is vocalization. Is there singing, is there constant interaction. You put all three together you get a super spreader event. I believe that the data and evidence coming out at travel is that while it is an enclosed space in terms of venue, ventilation is actually quite good. The air within an aircraft changes 20 to 30 times every hour. And I think it’s also the way the air is blown from ceiling to floor, and how the air is filtered as it changes. And most importantly, sometimes we get these chattering passengers. But most of the time, we don’t talk very much, we have our earphones on, and we watch our entertainment or we read our book. So there’s no, very little vocalization on the plane. So I think all these factors put together at the end can be a fairly safe setting.
SJ: Minister right now the green lanes that have been mandated and that have been open are within this region within Asia Pacific. Are there any discussions that are happening about opening up these green corridors for official or business travelers into regions outside Asia?
OYK: We should look at them. I think you use the word, lanes, corridors, but I think for safe countries, we wanted to get bubbles. So you allow general travel. But beyond those areas, where the epidemic incidence rate is too high, we should look at – is there a way to bring in travelers, but you put in enough conditions and enough measures. So you can for example, take a pre departure test, make sure you’re all right, and you arrive you take another post-arrival test. And throughout your itinerary, can we control it, segregate you from the rest of the population. You can come in, get business done or visit a loved one, or for ever compassionate reasons you need to come in, come in on the limited basis. I think we should also actively explore that so that we keep the channels and links open so that when epidemic control is more successful, we can reopen and elevate that into a bubble.
MS: Minister, if we can move on and talk about SIA, Singapore Airlines, the flag carrier, that state carry here, you’ve been quoted recently saying that now is just not the time for an environmental tax on the airline. That’s probably the last thing they need. And I think a lot of people would agree with you, with the exception of probably the political opposition. But my point is more, despite the huge capital raising that SIA has done, the cash burn for this airline is still just enormous. So, a couple of questions. One, I’m sure you have a finger on the pulse of this airline, how close are they do you think, to having to come to market to ask for more money including potentially, from the government or from Temasek etc. And two, if it comes down to a very hard choice, the future of Singapore as an air hub, versus the future of the state or flag carrier? Would the choice have to be made in favor of Singapore as an air hub?
OYK: And speaking as Ministry of Transport, I think the two objectives align, we need to have a vibrant air hub for a small global economy like Singapore. But for it to succeed. For this strategy to succeed, we do need a national carrier that is performing well, connected to different parts of the world. So I don’t think there is a binary choice between the two. Chances are if you do well on one, you will do well on the other and they are mutually reinforcing. SIA has a capitalization program line-up, it will make the necessary disclosure as a listed company. But I think from the government point of view, the most important thing to help them is to be able to revive the aviation sector in a safe way. And I think today, given the testing resources we have, given that performance in different countries and regions are uneven, but amongst them there are places where they have successfully controlled the virus. And lastly, the political will – if you put all three together, I think that there is enough for us to do. We did a calculation – we just look at countries that have similar or better risk profile than Singapore. That alone is 42% of our pre-COVID market. So there’s a lot to work for today we’re down to 1.5%. Just amongst the same places, there’s 42%. So just focus on this. There’s a lot to work for.
MS: You know green lanes, which we’ve already talked about Minister here are fine, business and also essential travel. But really to get volumes up for a carrier like let’s say SIA which is running at about 15% of pre-COVID levels. It’s got to be able to do volume business, which would come when we finally start to have travel bubbles. You’ve talked about the criteria before, whether it’s unilateral or whether there’s reciprocity involved. Can you tell us who Singapore right now is in talks with to establish bubbles?
OYK: I think some of the incidence rates of countries and places are available online. The very widely recognized ones, China and around that Hong Kong, Macau, Taiwan, New Zealand, Australia, Malaysia for a long time, Vietnam, Brunei, Thailand. And these are all places that I think have quite a good established record of having kept the epidemic under control. As to exactly who we are who we are talking about, I want to give a bit of confidentiality to our partners in just as a matter of respect to them. But as and when we make some breakthrough, in our talks, we will definitely announce that.
SJ: Minister, can I if you don’t mind me, I may just press you a little bit on that, because I thought you said something very, very interesting about how you are actively exploring options for bilateral travel, even with countries that have a relatively high rate of infections. And when I look at the regional map, if not the global map, India really stands out the second highest rate of infections globally. But is there perhaps a bilateral travel model? Green lanes, bubbles or corridors or otherwise, that would fit India’s case? Or is this a situation that is just off limits for Singapore?
OYK: Yeah. So, so, for the safe countries, just to reiterate a bit, I think, because the risk profile are the same, you actually can treat them, treat ourselves, as one single quarantine area. And just for precaution, we can still administer a test just to make sure travelers coming in are safe. Sri, you’re asking more interesting questions for countries and places where the incidence rates and risk profile are higher. I think the key thing is this – in our minds is today there is a no landing and borders are closed. How do we lift that? Number one.
Number two, after you lift that, the most sure way of ensuring that travel is safe, is a mixture of whoever arrives, you help him out for 14 days. Quarantine, which is probably the longest incubation period for the virus, to make sure that they are safe. But nobody will travel if they have to be locked up for 14 days, or under quarantine for 14 days. So what can we do to replace the quarantine, to live the borders, number one, to replace the quarantine for 14 days with something else. And I think that something else can only be three things based on science based on the evidence.
Number one test. Not one test, but probably a protocol involving repeated testing. And I think with more advanced testing methods now or different testing methods, now that we are seeing. There is antigen test there’s breathalyzer test, deep throat saliva, different ways of extracting samples and different ways of processing them. We can look at a repeated testing protocol.
Number two, can we control the itinerary or for that matter, control the venues that such travelers can go to and for many business travelers. Really they just need to come to one location, have a meeting, sign an agreement and they leave. In fact, come to think of it pre-COVID that’s how I travel, I rarely even see the sun, I go into the hotel, from airport to hotel, got my meetings, signed some agreements and off I go. So not much different from there. But can we create venues such as this that is segregated, that-that travelers are bubble wrapped.
And thirdly, which Singapore has started doing in a fairly robust way, is tracing so that everyone carries a token, And should there be any outbreak or any incidents of infection you can trace down affected people very quickly. So I think it’s to really look at all three to see how we can replace 14 day quarantine.
MS: Okay, well, we’ll be following it very closely. Thank you, Minister for your time. Excellent talking to you. As always, please keep safe.
END
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