Airline leaders recommend making it easier to issue visas for tourists

This is a recommendation made by leaders of several airlines to increase their appeal to international tourists, especially large potential markets such as the US, Australia, India, China, etc.

Scene of the Workshop "Aviation - Tourism join hands to develop sustainable development".

“Aviation and tourism are like two wings of an airplane. This is an image showing the organic relationship, closely connected and inseparable between the two industries,” Mr. Nguyen Cong Hoan, General Director of Flamingo Redtours emphasized at the Workshop "Aviation - Tourism join hands to develop sustainably" organized by Nhan Dan newspaper on the afternoon of June 12.

Motivating the airline

According to the CEO of Flamingo Redtours, the tourism industry cannot develop without air transport services. Because tourists increasingly want to explore further lands, experience more convenient services, and spend less time traveling, which only air transport can provide.

On the contrary, in the aviation industry, the proportion of passengers flying for tourism-related purposes is high and increasing. Tourists play a decisive role in the existence or non-existence as well as the frequency of operation of many flight routes.

Sharing the above viewpoint, Mr. Nguyen Huu Y Yen, Chairman of the Board of Directors of Saigontourist Travel Services Company Limited, said that tourism products related to air routes often account for more than 60% of total tourism products and services.

To ensure that new products are commercialized in the market and continue to attract customers, a competitive and stable price policy plays a very important role in capturing customer market share. Normally, a new tourism product needs 1 to 2 years to build its brand, requiring stable policies from airlines, plus stimulus policies in the early stages.

Currently, the continuously increasing airfares mean that Vietnam tourism is less competitive for both domestic and international tourists; reducing the demand for travel. In this context, tourists will look for alternatives with more suitable means of transport and closer destinations. In fact, Saigontourist has also had to flexibly expand its road, rail, expressway tour products, combo packages, and individual services departing from 18 localities where the Company has branches.

“In the long run, this could reduce the competitiveness and attractiveness of Vietnamese tourism to international tourists and domestic tourism to domestic tourists. The habit of waiting for stimulus and price reductions will also cause unwanted effects on the tourism market,” a representative of Saigontourist worries.

According to Mr. Nguyen Quang Trung, Head of Planning and Development Department (Vietnam Airlines), recently, public opinion has raised the issue of airfares increasing too high, affecting tourism activities. In fact, the increase in airfares of airlines is in line with the general trend of the global aviation industry, due to the impact of the main reasons including: high fuel prices; an average increase of 34% in 2024 compared to 2019 (from 76.7 USD/barrel to 102.8 USD/barrel); inflation and currency devaluation, in Vietnam, an average increase of 8% in 2024 compared to 2019.

In particular, the engine recall by Manufacturer Pratt & Whitney (PW) has led to a global aircraft shortage affecting aircraft rental prices (an average increase of 20-30% in 2024 compared to 2019).

In Vietnam, recently, high ticket prices have mainly occurred during peak holiday periods or during good times and days when demand for air travel increases. At present, passengers can still choose low, reasonable prices when choosing flights to avoid peak times, peak days and hours.

Vietnam Airlines representative said that the fact that domestic airfares are higher than normal at certain times only affects a portion of passengers traveling domestically.

Overall, with the proactive search and launch of new markets, many new routes have been opened by airlines in recent times and have contributed greatly to the recovery and international tourism, enhancing the competitiveness of destinations by expanding and strengthening international routes, not only to Hanoi and Ho Chi Minh City but also to other localities such as Da Nang, Cam Ranh, Phu Quoc, Da Lat.

When referring to the comparison of the difference between domestic airfares in Vietnam and other countries in the world, Bamboo Airways General Director Luong Hoai Nam said that each airline has a range of airfares from cheap to expensive. “We cannot compare expensive domestic airfares in Vietnam with promotional international airfares in other countries. That is not a comparison on the same level, causing distortion and incorrect information.”

Faced with the recent upward trend in domestic airfares, Mr. Luong Hoai Nam said: "There is only one solution to reduce airfares as consumers desire, which is to increase the number of aircraft of Vietnamese airlines."

“Desire and reality must go hand in hand,” Mr. Luong Hoai Nam emphasized. The number of aircraft this year of domestic airlines has decreased too much, from 230 aircraft before the pandemic to about 160 aircraft at present.

“The number of domestic airlines has decreased by 25% compared to before. Even when there is a shortage of aircraft, Vietnamese airlines still tend to want to keep international routes to keep slots at foreign airports. Therefore, the decrease in supply in the domestic market is higher than 25%, in fact it is 30%. Thus, supply cannot meet demand,” said the General Director of Bamboo Airways.

There is a shortage of about 60-70 aircraft compared to the normal operating and development needs, but no additional aircraft are rented to make up for the shortage. According to Mr. Luong Hoai Nam, the underlying problem is that with the current aviation input cost level, domestic airlines are not profitable, the more aircraft they rent, the more losses they have to bear, and the huge costs they incur.

“There are still many planes in the world for airlines to rent, but the rental prices are very expensive. We need to find solutions to make domestic air transport business economically efficient. If there is profit, without anyone reminding, airlines will also, for their own benefit, look to rent more planes. At that time, domestic airfares will certainly cool down,” said the general director of Bamboo Airways.

Also within the framework of the Workshop, the Tourism Advisory Board (TAB) raised the issue of needing to reconsider the existence of the mechanism for managing domestic airfares by ceiling prices. Agreeing with this opinion, Mr. Luong Hoai Nam said that in the world, there are almost no countries that manage aviation by ceiling prices. It is necessary to reconsider this way of managing airfares so that the domestic aviation industry has the opportunity to develop like other countries in the region and the world.

Bamboo Airways representative proposed to remove air passenger transport services from the list of services with state price control. The domestic air transport market is increasingly competitive, basically no longer monopolistic, so service prices must be adjusted according to market mechanisms to help airlines have the opportunity to build a high fare range for high-income customers, while also adding room for a low fare range for low-income customers.

“Most countries in the world have seen strong growth in domestic and international passenger volume after removing the ceiling on airfares. Even in the ASEAN region, Thailand and Indonesia do not have ceilings on airfares, yet aviation and tourism have developed together like this,” said Mr. Nam.

Strengthening tripartite cooperation

According to the Civil Aviation Authority of Vietnam, although we are entering the peak summer tourist season, ticket prices excluding taxes, fees, and additional service surcharges for basic economy class on domestic flights only fluctuate between 30% - 70% of the maximum regulated level.
When booking tickets for departure at the end of June - the peak summer season, for example on the "golden" route Ho Chi Minh City - Hanoi, Vietnam Airlines offers tickets at prices ranging from 1.2-1.7 million VND/way (35%-50% of the maximum), Vietjet Air has prices ranging from 0.8-1.4 million VND/way (24%-42% of the maximum), Bamboo Airway and Vietravel Airlines have prices ranging from 0.9-1.3 million VND/way (27%-39% of the maximum).
On tourist routes such as Hanoi - Da Nang, Vietnam Airlines offers tickets from 0.6-1.7 million VND/way (21%-56% of the maximum), Vietjet Air has prices from 0.5-1.6 million VND/way (18%-42% of the maximum), Bamboo Airways from 0.95-1.7 million VND/way (33%-56% of the maximum), Vietravel Airlines from 0.7-1.5 million VND/way (24%-52% of the maximum)...

According to Ms. Luong Thi Hoang Lan, Sales Director of Resort Tourism, Sun Group Corporation, in addition to the relationship between airlines and tourism businesses, there needs to be an additional role for destination localities.

“This three-way connection not only benefits all parties, contributes to promoting the brands of both parties and the image of the destination, but also contributes to spreading and promoting the image of Vietnamese tourism in general to international friends,” she assessed.

According to a representative of Sun Group, although there have been some positive results from the connection with localities and aviation, businesses believe that the existing connections are not yet comprehensive and national in scale to create a strong spillover effect, in which the interests of aviation and tourism businesses must be ensured.

To overcome this situation, businesses recommend that there should be an early national-scale comprehensive cooperation plan, in which the "conductor" role of the high-level state management agency, the Vietnam National Tourism Administration or the Government, should be involved to discuss short-term and long-term cooperation plans on the basis of sharing benefits and responsibilities among the parties.

“Not only aviation and tourism need to come up with good price policies, but localities/destinations also need to come up with reasonable price incentive policies (on resorts, transportation, restaurants, etc.) to create conditions for building quality resort programs and combos with preferential prices including air tickets, hotel rooms and tours, etc. This solution helps all three parties, namely localities, aviation and tourism, benefit, stabilize the number of visitors and achieve the highest efficiency,” analyzed a representative of Sun Group.

Sun Group representatives also proposed that the Vietnam National Tourism Administration coordinate with embassies in many key and potential international markets to find solutions to open more international flights to important destinations in Vietnam such as Phu Quoc, Da Nang, Quang Ninh, Nha Trang, etc. to diversify and increase new tourist markets, while limiting dependence on some large traditional international markets such as China, Korea, etc.

“The growth of any tourist market at the present time (for example, Korea) can be saturated in the future, and this is the solution for Vietnam to look for new international markets that are strong enough to compensate for fluctuations,” said a representative of Sun Group.

According to the Chairman of Saigontourist, in order for the promotion and advertising link between tourism and aviation to be effective in the long term, the parties need to ensure the following factors.

Firstly, the business strategy, the ability to develop the source market and the sales channel scale of the parties to correctly identify the market to promote and the appropriate customer - tourism product.

Second, commitment to resources and long-term investment policies on development and expansion of Market segments - Flight frequency - Products.

Third, preferential, promotional and stimulus policies are applied in appropriate stages.

To help the aviation and tourism industries effectively connect and develop together, Vietnam Airlines proposes that the Government and relevant ministries consider developing a long-term and detailed overall aviation and tourism cooperation strategy because these two industries have a close relationship with each other.

Tourists are the main source of customers in the current Vietnamese aviation market. International tourists also come to Vietnam mainly by air. Therefore, when the tourism industry develops, aviation will develop and vice versa.

In addition, consider establishing a specialized agency or adding the task of coordinating the connection between aviation and tourism to the Vietnam National Tourism Administration. This will help trade promotion activities and the connection between aviation and tourism become more active and effective.

In particular, it is necessary to soon establish a professional organization for promoting and launching Vietnam destinations with a long-term and focused plan. In addition to increasing the budget for this activity, the Government can request the participation and contributions of relevant parties such as airlines, travel companies, accommodation establishments, etc.

“Management agencies need to further loosen immigration policies, thereby adding visa-free countries, especially large potential markets such as the US, Australia, India, China…”, a representative of Vietnam Airlines proposed.

As the most active airline in reopening domestic and international routes right after Vietnam's tourism reopens, Vietjet's representative said that in order for Vietnam's aviation and tourism to develop together and attract more tourists, Vietjet's representative proposed that the Government, ministries and sectors continue to promote bilateral and multilateral negotiations and agreements with countries to have more favorable policies on visas, issue e-visas more conveniently, and support activities to open new routes to promote the needs of people and tourists.

“It is necessary to develop programs to promote Vietnamese tourism at the national level, with priority given to supporting initiatives to develop sustainable tourism. It is not just a temporary combination between tourism and aviation businesses, but a long-term “handshake”, based on companionship and sharing common benefits. The support of the Government, management agencies, and localities in the process of building and developing unique tourism product packages and programs will also contribute to the sustainable development of the tourism and aviation industries,” Mr. Do Xuan Quang, Deputy General Director of Vietjet Air, proposed.

Mr. Do Xuan Quang, Deputy General Director of Vietjet Air

According to Minister of Transport Nguyen Van Thang, since the time of resuming normal operations (March 2022), with solutions and support from management agencies, Vietnamese airlines have made efforts to restore operations.
However, unresolved internal difficulties are still a major obstacle preventing Vietnamese airlines from recovering to their pre-pandemic status. In addition, since the end of 2023, the impacts of increased input costs and fluctuations in fleet size have been the main causes of pressure on domestic airfares during peak periods.
However, in the context of many difficulties, the number of aircraft decreased as well as the need to balance exploitation on routes to meet the travel needs of passengers, in general, the aviation market exploitation recorded growth in passenger transport output, especially international air transport.
However, there are still many things that can be done better between aviation businesses and travel and tourism businesses in further improving the efficiency of connection between industries, promoting the achieved results and working together, sharing, towards the goal of long-term sustainable development.

Source: https://baodautu.vn/lanh-dao-hang-bay-kien-nghi-tao-thuan-loi-hon-trong-cap-visa-cho-khach-du-lich-d217524.html