109 Annual Report 2020 >> Our Performance In addition, the local airlines have made the strategic decision to focus on domestic routes to respond to the COVID-19 market demands. With international borders still closed, they are now focusing on enhancing local connectivity between the states, especially those with heavily frequented tourist destinations and business hubs. Catalysts for our markets While there continues to be uncertainty on the trajectory for recovery of the aviation industry in Malaysia and globally, we are keeping a close watch on certain catalysts which will spur growth. Among these is the rollout of the vaccination programme in Malaysia, Turkey and as well in our target markets. Malaysia has indicated that the country is targeting to complete the vaccination of 80% of the adult population by February 2022, to achieve a level of herd immunity within the population that will enable a return to some semblance of normalcy. Reciprocal Green Lane arrangements between Malaysia and Singapore, and those under discussion with Indonesia and China will also boost air traffic. Discussions are also on-going within ASEAN and other countries in the Asia Pacific such as Japan, South Korea, Australia and New Zealand for similar arrangements. The introduction of vaccine passports, which are essentially digital vaccination certificates, are also in development, and there are efforts to secure reciprocal recognition among nations for vaccines administered to individuals and which are certified by the government. We are also following closely the developments around the announcement by the Kingdom of Saudi Arabia that has indicated that the Hajj will be permitted this year for vaccinated pilgrims. The return of Hajj and Umrah traffic will be a welcomed boost for passenger numbers. In Turkey, mass vaccination of the population began in January 2021, with the aim to complete shots for its population over the age of 40 by the end of June 2021 and for those over the age of 20 by July 2021. There is also an initiative to develop indigenous COVID-19 vaccines including the world’s first intranasal COVID-19 vaccine. The Turkish government has introduced a ‘Safe Tourism Certificate’ programme to instil confidence among tourists on the health and safety in the country. The country is projecting to welcome double the number of tourists this year compared to the 12.7 million in 2020. Operating Agreements Malaysia Airports had reached a major milestone in 2019 when we secured the approval of the Government of Malaysia for the extension of our operating agreements (OAs), thereby extending our licence to operate, manage and maintain the network of airports in Malaysia for a further 35 years till 2069. The current term of the OAs is due to expire in 2034. In the discussion with the government on finalising the OAs, Malaysia Airports has prioritised the inclusion of a sustainable funding model for future growth and development of the network of airports. This will enable Malaysia Airports to plan with greater certainty for long-term investment into the continued competitiveness of the airports and the sustainability of the network as well as to have the capabilities to respond swiftly to changes in critical needs. We expect to reach a final agreement with the government in the course of 2021. Future F.I.T. - Malaysia Airports’ 5-Year Strategy and Transformation Plan Looking beyond the pandemic Future F.I.T. addresses the immediate challenges of the current operating environment while laying the foundations for dynamic post-pandemic growth. In view of the above, we are working to ensure that Malaysia Airports continues to be able to weather any turbulence ahead. While there appears to be light at the end of the tunnel, the situation remains fragile. Until there is a level of herd immunity, the virus together with the new variants may lead to more cautious sentiment as these variants may be able to disrupt public health. A resurgence of the virus could dampen confidence among travellers and impact our recovery. While Malaysia Airports has maintained business and financial stability in the face of the pandemic, in order to stay the course of the new normal, we need to be vigilant and take swift and decisive action to remain ahead of the curve. In this regard, while the operating environment remains uncertain, it also presents opportunities for future growth. We have therefore reformulated our strategies and plans to reflect the impact of the COVID-19 pandemic and challenges faced in the aviation industry on the future direction of the Group.
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