SINGAPORE — Singapore Airlines shares jumped Monday after the city-state confirmed it was in talks with Australia to set up an air travel bubble.

Singapore Airlines shares were up 5.47% in afternoon trade, after surging as much as 8.49% earlier in the day. Airline-related shares such as SATS, a subsidiary company that provides in-flight catering, was up 3.43% while SIA Engineering advanced 4.65%.

Australian flag carrier Qantas gained 3.77% at market close.

An air travel bubble would allow residents of Singapore and Australia to travel between both countries without the need for quarantine. International travel routes have remained relatively limited since global borders stayed shut last year due to the Covid-19 pandemic.

Both Singapore and Australia appear to have brought the infection under relative control, while vaccination programs are also underway.

“Singapore is currently in discussions with Australia on the mutual recognition of vaccination certificates and resumption of travel with priority for students and business travellers,” the Ministry of Foreign Affairs in Singapore said in a statement on Sunday.

“We are also discussing the possibility of an air travel bubble which will allow residents of Singapore and Australia to travel between both countries without the need for quarantine,” the ministry said.

Australian nationals can transit via Singapore without quarantine to return home if they travel on approved transit routes and comply with the state’s public health protocols, the statement added.

Australia’s Deputy Prime Minister Michael McCormack told local media on Monday that Canberra is potentially looking at July for the travel bubble with Singapore. But according to a transcript of his remarks, he added that while talks are productive, the discussions are in early stages.

Singapore’s tourism sector saw a steep decline in the first nine months of 2020, according to data from the tourism authority. International visitor arrivals plunged 81.2% to just 2.7 million from a year ago and tourism receipts fell 78.4% to 4.4 billion Singapore dollars ($3.27 billion).

The city-state previously has tried to set up an air travel bubble with Hong Kong since last year. But it was postponed after Hong Kong reported a resurgence in new Covid-19 cases.

Last week, Singapore’s Transport Minister Ong Ye Kung told CNBC the country is not giving up on trying to establish the travel bubble agreement with Hong Kong.

Singapore has allowed visitors from certain places, including Australia, New Zealand, mainland China and Taiwan, to skip quarantine if they meet certain requirements — such as a negative Covid-19 polymerase chain reaction (PCR) test upon arrival.