China's visa push opens ASEAN skies

China's decision to extend five-year multiple-entry visas to Southeast Asian business travelers is expected to boost the region's aviation sector, industry executives say.

As the largest trading partner of the Association of Southeast Asian Nations, China announced last month that it would offer the long-term visas to eligible business travelers from ASEAN's 10 member states and observer Timor-Leste. The move is widely seen as a catalyst for increased flight frequencies, expanded regional destinations and stronger business travel demand.

"When you remove these invisible barriers, you're going to get more people traveling and doing business together," said Tony Fernandes, CEO of Capital A, the Kuala Lumpur-based operator of ASEAN's largest airline AirAsia.

The visa policy will significantly benefit AirAsia, which is a popular choice among small- and medium-sized enterprises, a group that makes up more than 90 percent of businesses in ASEAN, he said.

AirAsia currently flies to about 20 destinations in China from across Southeast Asia, he said, adding the airline will continue to make its fares low and attractive.

Fernandes said his team is working to expand both its flight network and frequency. He also emphasized the importance of having the right time slots to maximize the benefit of the visa policy.

"We need to have good time slots to get businessmen to come and maximize their day, coming fairly fresh, as opposed to overnight flights," he said.

For Dersenish Aresandiran, chief commercial officer of airlines at Malaysia Aviation Group, China's new visa policy for ASEAN business travelers is a "significant step forward for regional connectivity".

Simplified visa requirements lower entry barriers, making it easier and more attractive for ASEAN business communities to engage with Chinese partners, Aresandiran said.

Malaysia Aviation Group operates the flag carrier Malaysia Airlines, which is closely monitoring travel patterns and will adjust capacity on its China routes as needed, he said. The airline is keen to initiate more co-branded campaigns, loyalty program collaborations, and special incentives for corporate travelers and those in the Meetings, Incentives, Conferences and Exhibitions sector, he added.

"By aligning our efforts with Chinese businesses — whether through cargo, tourism or business travel — Malaysia Airlines aims to play a key role in supporting bilateral trade and tourism growth," he said.

The Asian aviation industry — one of the hardest-hit sectors during the pandemic — has been recovering strongly in recent years thanks to a rebound in both passenger and cargo demand.

According to the latest report from the Association of Asia Pacific Airlines, carriers in the region transported 158 million international passengers in the first five months of the year, up 12 percent from the corresponding period last year. International airfreight demand also rose by 4.5 percent year-on-year.

Subhas Menon, director-general of the association, said in a statement that continued improvements in air connectivity are expected to support growth in travel demand.

However, Menon cautioned that Asia-Pacific carriers are facing an "increasingly challenging operating environment" owing to rising trade and geopolitical tensions, supply chain constraints, and volatile fuel prices.

China's introduction of the ASEAN business visa comes at a time when Asian carriers are going through these challenges. Even before this initiative, China had entered into bilateral visa-free travel arrangements with Malaysia, Singapore and Thailand.

"Anything that makes travel more seamless, including the availability of visas, is always something we would look forward to," said Alexander Lao, president and chief commercial officer of Cebu Pacific, the largest airline in the Philippines.

Reliability matters

For routes with shorter flight times, such as those between the Philippines and China, Cebu Pacific does not see huge demand for business class travel, Lao said. For many business travelers, especially those from small- and medium-sized enterprises, the airline's reliability, frequency and affordability matter more, he added.

"It's not necessarily about the lounges or business class seats, but it really is the value for money and reliability that an airline like Cebu Pacific can offer," he said.

Aresandiran said business travelers are not just interested in value but also in greater flexibility, comfort and a higher level of personalized service.

Fernandes said AirAsia differentiates itself by focusing on second- and third-tier cities in China, rather than just major hubs such as Beijing and Shanghai — in an effort to make travel more inclusive.

Yang Han in Hong Kong contributed to this story.