The FINANCIAL — From the snowy peaks of the Pamir mountains to the vast wilderness of the Karakum desert, Central Asia is a region of astonishing natural beauty and historical significance. In recent years, the region has emerged as a rising tourism destination attracting a growing number of visitors – both international and domestic.
But with COVID-19 initiating a wave of border closures in March, tourism and aviation in Central Asia have suffered a devastating blow. For countries in the Central Asia Regional Economic Cooperation (CAREC) Program – a partnership for 11 nations to promote economic growth and development through regional cooperation – virtually all international flights were suspended and several countries banned domestic air travel to contain the disease.
Domestic flights in all CAREC countries have resumed but domestic traffic remains below pre-pandemic levels while international traffic is a tiny fraction of what it was as restrictions on international travel remain in place.
As a result, the CAREC region (excluding the People’s Republic of China) could see a drop of almost 70% in airline passengers in 2020 according to a forthcoming study by the Asian Development Bank. This translates to 40 million fewer passengers and roughly $7 billion in lost passenger revenue, putting up to 1 million travel and tourism jobs at risk.
While the crisis is an unprecedented challenge for aviation and tourism, it also presents opportunities to reshape and restructure the industry to protect and promote jobs and businesses. Here are five ways to revitalize aviation and tourism industries in CAREC member countries.
1. Grow domestic tourism
While international air traffic remains significantly reduced, CAREC countries should take the opportunity to boost domestic and intra-regional tourism. With more people taking holidays closer to home, there is an opportunity for hotels, restaurants, and tourist attractions that normally mainly cater to foreign visitors to recover some lost revenues.
For example, Kazakhstan is particularly well positioned to attract domestic air travelers due to low air fares and a young population that is eager to travel. Kazakhstan’s domestic market grew rapidly in the second half of 2019 and the first two months of 2020, driven by a newly established low-cost airline. With flight and hotel promotions to stimulate the budget segment of the market, Kazakhstan’s domestic market could be back to pre-crisis levels by the end of 2020.
2. Create green lanes between CAREC countries
While travel beyond the region is likely to remain restricted until a vaccine is widely available, CAREC countries have an opportunity to grow tourism within the region by establishing green lanes with selected countries.
Green lanes, or air bridges, enable countries that have been relatively successful in containing the virus to reopen to each other with certain requirements such as testing negative for COVID-19 prior to travel. CAREC could be used as a platform for bilateral and multilateral agreements setting these requirements.
For many CAREC residents who have never fully explored tourism destinations in neighboring countries, establishing green lanes would help to facilitate increased tourism and stimulate economic activity. The region can also be considered relatively safe given its low population density and open spaces allowing for social distancing.
3. Improve air connectivity within CAREC
Promoting regional tourism would also help boost connectivity within CAREC, where the current lack of nonstop flights within the region makes travel difficult. Under normal circumstances it could take some time to rebuild the limited connectivity between CAREC countries that existed pre-COVID 19, but re-establishing pre-existing air connections could be done quickly in 2021 if green lanes were put in place.
Green lanes would stimulate demand for air travel within CAREC, enabling airlines to resume intra-CAREC routes more quickly than routes leading outside the region. More travel within CAREC will set the foundation for improved connectivity within the region. Once international visitors return, it will be easier for them to visit multiple countries, eventually attracting more long-haul flights and visitors.
An uptick in intra-CAREC travel would also help improve coordination between CAREC tourism authorities and governments. This in turn could give way to visa facilitation and airline partnerships which can encourage even more travel within the region.
4. Expand cargo capabilities
While global cargo volumes are down this year, some CAREC airports have experienced a significant increase in cargo flights due to their strategic location. As cargo flights between Asia and Europe have increased, more aircraft have been stopping in CAREC countries to refuel and change crews. This is an opportunity for CAREC’s aviation industry to further invest in cargo capabilities, providing a foundation for long-term growth.
While CAREC has several freighters and cargo airlines, airports and governments should look at further investing in facilities to help attract more transit cargo and support exports during the crisis. With the right strategy, cargo can generate more revenues for CAREC’s aviation industry and help stimulate trade.
5. Upgrade airports with contactless technology
While many airports in the CAREC region still rely on manual check-in and boarding processes, the crisis presents an opportunity to speed up the adoption of new digital technology and procedures. With new digital and contactless procedures, such as online or mobile check-in and document checks, passengers would be able to bypass the check-in desk, and drop their bags off at designated belts without needing to interact with any staff. This will expedite the time required to process passengers and increase overall efficiency of airports.
Contactless security and immigration are also possible with investments from airports and governments. Capacity constraints must be carefully managed to meet social distancing requirements.
CAREC countries should look at adopting the new guidelines and recommendations issued by the International Civil Aviation Organization. By conforming to new global standards, CAREC countries will facilitate the resumption of international travel and eliminate differences in regulations from country to country that create challenges for airlines and passengers.
The CAREC Program will continue to promote sustainable tourism as a key driver of growth, development, and socio-economic recovery from the pandemic.