Vietnam's aviation industry will fully recover by the end of 2024, in line with the general trend of the Asia- Pacific market, according to the Civil Aviation Authority of Vietnam.
This assessment was made by the Civil Aviation Authority of Vietnam when analyzing the demand for passenger transport, Vietnam's economic growth compared to the time before the Covid-19 pandemic and the recovering international market.
According to the agency, the demand for passenger transport this year is expected to be more than 84 million, an increase of 15% compared to 2023 and 6% compared to 2019 - the time before the Covid-19 pandemic. Of which, domestic visitors are expected to increase by over 3%, reaching about 41.5 million; international visitors are nearly 43 million, an increase of 16% compared to last year.
This year, Vietnamese airlines are expected to transport 61 million passengers, up more than 9% compared to 2023.
"The domestic aviation market will recover by the end of this year when receiving positive signals, such as increased capacity to exploit domestic and international routes thanks to tourism development policies of localities and countries around the world ," according to the Civil Aviation Authority of Vietnam. The fact that airlines plan to open new routes is also an opportunity for market development.
Airplanes at Noi Bai airport. Photo: Giang Huy
However, according to the Civil Aviation Authority of Vietnam, there are still risks affecting the domestic aviation industry in 2024, such as inflation and exchange rates. Accordingly, signals that many countries maintain tight monetary policies, fuel prices may increase due to geopolitical conflicts in the Middle East, or a shortage of high-quality human resources... are risk factors for the industry.
The recall of aircraft engines by Pratt & Whitney has also caused a shortage of aircraft resources, directly affecting the plans for exploitation, recovery and expansion of flight networks of airlines. The infrastructure of some domestic airports has not yet met the development of the aviation industry in the recovery process in 2024.
Many plans have been put forward by domestic airlines to meet demand when the market recovers. At Vietnam Airlines, Chairman Dang Ngoc Hoa said that this year, the airline will restructure its flight network to match the recovery speed of each region and market. The airline will also adjust its flight schedule to increase the efficiency of aircraft use, diversify ticket sales programs for each customer group, and maximize seat utilization.
However, the Chairman of Vietnam Airlines is concerned that aviation has not fully recovered, especially in key international markets such as Japan, South Korea, and China; interest rates are still high and domestic airport infrastructure has not kept pace with growth. Last year, overload at domestic airports, especially Tan Son Nhat and Noi Bai, caused the airline nearly VND500 billion in losses.
From a management perspective, the Civil Aviation Authority said it would put forth priority development policies such as forecasting market demand, working with airlines to come up with practical solutions based on infrastructure operating conditions, and supplementing supply on routes with high demand.
"Some airports will be required to increase their operational and flight management capacity to best meet the operating needs of airlines and the increasing travel needs of people," said the Civil Aviation Authority.
The Department also recommended that the Government reduce some taxes and fees until the end of 2024, support interest rates for businesses, and work with aviation authorities of countries to increase supply capacity and support operations at international airports.
According to the forecast of the International Air Transport Association (IATA), the Asia-Pacific market, the slowest recovering region, could break the loss streak and achieve a profit of about 1.1 billion USD in 2024. IATA estimates that this year, global airlines will achieve a record revenue of 964 billion USD, of which revenue from passenger transport will be about 717 billion USD, an increase of 12% compared to 2023.
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