Singapore — Singapore's Connect@Changi -- a pilot short-stay facility designed to support safe business exchanges between international business travelers and Singapore residents -- and other measures to propel air travel are positive but will unlikely prop up jet fuel demand and prices drastically until widespread fears of the global coronavirus pandemic dissipate, sources said Feb. 22.
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"In my opinion, any move to aid the aviation sector is helpful. If people feel that a meet-up is needed, they will travel and this will increase demand [for jet fuel]," a source said.
However, some sources were less optimistic about prospects of a significant demand recovery anytime soon.
"I think that business [travelers] might not be so eager to travel yet, especially when vaccines [globally] are not fully rolled out," a Singapore-based refining source said.
Another source resonated a similar sentiment, adding, "I understand that Singapore needs to boost its own economy, but I don't know if companies will jump at such a chance for a face-to-face meeting."
On the pricing front, the FOB Singapore jet fuel/kerosene cash differential remained in discount territory and was assessed at minus 22 cents to the Mean of Platts Singapore jet fuel/kerosene assessment at the 0830 GMT Asian close Feb. 22.
The cash differential has been in discount for nearly three months and was last seen in premium territory on Dec. 7, 2020, at MOPS plus 2 cents/b, Platts data showed.
In the derivatives market, the M1/M2 FOB Singapore jet fuel/kerosene timespread remained in a contango structure and was assessed at minus 20 cents/b on Feb. 22, and was last seen in backwardation on Jan. 31, 2020, at plus 48 cents/b, Platts data showed.
The Connect@Changi project is developed by a Singapore consortium, led by Temasek and includes The Ascott Limited, Changi Airport Group, Sheares Healthcare Group, SingEx-Sphere Holdings and Surbana Jurong.
Connect@Changi is launching with 150 guest rooms and 40 meeting rooms that can accommodate a range of meeting sizes, from four to 22 attendees, Temasek said in a statement Feb. 18.
This will expand to around 660 guest rooms and 170 meeting rooms, when the initial phase of the project is completed in May, and when fully completed later this year, the facility will have the potential capacity to host some 1,300 business travelers at any one time, it said.
Singapore-based visitors are not required to undergo testing when accessing the facility, as foreign travelers and local visitors have completely separate entrances, exits and ventilation systems.
Meanwhile, hopes for the launch of the much anticipated Singapore-Hong Kong air travel bubble have also resurfaced.
Singapore and Hong Kong are in "close discussions" on the suspended air travel bubble for leisure travel without quarantine, as the COVID-19 situation in Hong Kong appears to be easing, The Straits Times said Feb. 20.
This would be welcome news for Singapore Airlines, or SIA, Group, which like many other airlines has suffered due to the sharp downturn in air travel, sources said separately.
SIA Group 2021 Outlook
During the quarter ended Dec. 31 2020, the SIA Group gradually expanded its operations by reinstating services to key cities as well as mounting additional frequencies to existing destinations, SIA said in its latest quarterly results announcement on Feb. 4.
At the end of December 2020, SIA served 38 destinations including Singapore, up from 31 at the end of September 2020. SilkAir increased the destinations served to eight, up from six, while Scoot's network remained unchanged with 17 destinations, it added.
"Based on our current schedules, as of end-April 2021, the Group's total passenger capacity is expected to be at around 25% of pre-Covid levels, and we expect to serve around 45% of the points that we flew to before the crisis," it said.
In line with Singapore's progressive re-opening, the Group expects to see a measured expansion of the passenger network over the coming months, it said in February.