Vietnam Market Recovering Well

Vietnam’s aviation market is expected to strongly rebound this year as the recent recovery signs of both domestic and international traffic raise hopes following a bad year of 2021 due to the pandemic.

According to the Civil Aviation Authority of Vietnam (CAAV), domestic airlines operated 126,280 flights in 2021, down 41.7 percent year-on-year, and nearly 60 percent from the pre-pandemic level. International regular flights had been completely frozen since the first wave of the pandemic, except flights bringing home overseas Vietnamese or those carrying foreign experts. Vietnam welcomed only 111,100 international arrivals by air last year, a drop of 96.4 percent from the previous year.

According to the Vietnam Aviation Business Association (VABA), Vietnam has recovered some regular flights between Vietnam and other high coefficient safety countries, especially those in Asia, Europe and the U.S. The positive signals of the aviation industry in 2022 are shown by the restoration of international routes from the first days of the new year.

In the early days of 2022, Vietnam’s airports were packed with passengers, which was good news for the local aviation industry and a positive sign for strong economic recovery. During the Lunar New Year festival, passengers going through Tan Son Nhat International Airport in Ho Chi Minh City increased sharply, surpassing 100,000 on February 6 - the sixth day of the Lunar New Year. On February 3, Noi Bai International Airport in Hanoi also served 34,000 passengers.

Moreover, VABA also proposed the Ministry of Transport to soon recover and develop the domestic market, and keep expanding international flight routes as planned. At the same time, VABA recommended that there should be no limitation for the tourists, expatriates and people who want to visit Vietnam. They just access Vietnam with valid visas and passports and follow fully the requirements of epidemic prevention as prescribed from the Ministry of Health.

Notably, VABA also recommended the Ministry of Transport to continue bringing good conditions for aviation companies to get bank loans, keep reducing the environmental protection tax on aviation fuel to the minimum level and continue to reduce airlines taxes and fees until the end of 31 December 2022.

As planned, the Ministry of Transport sets a target that by 2030, the total passenger transport via airports will be 275.9 million passengers and 4.1 million tons of cargo. The demand for investment capital for the development of the airport system in the period of 2022 - 2030 is VND 400,000 billion (accounting for about 22% of the investment capital demand of the whole industry), which can be mobilised from the budget, non-budget capital and other legal sources of capital.

The International Aviation Association (IATA) also forecasts that in 2022, Asia will gradually recover, but the recovery speed will be slower than Europe and North America. Air transport will recover approximately 70 to 75% compared to the same period in 2019 before the pandemic. The international transport will reach about 20 - 25% compared to before the pandemic and gradually increase in the fourth quarter of 2022.

Bamboo Airways plans to operate direct flights to Japan, Taiwan and South Korea in phase 1. In phase 2, the airline is expected to operate direct flights to Germany, Australia, etc. In addition, Bamboo Airways is also ready to expand direct flights to Japan, Australia, the UK and especially the US (Ho Chi Minh City - San Francisco/Los Angeles).

At the same time, Vietravel Airlines has opened ticket sales for its domestic routes such as Hanoi - Ho Chi Minh City and from these two cities to major tourist destinations.

The vaccination rate in Vietnam has reached a high level, localities have begun to inject 3 doses of the vaccine on a large scale, "vaccine passport" with other countries, the pandemic has gradually been controlled and people are adapting to the new situation are bringing a brighter expectation in 2022 for Vietnam Aviation when "opening the sky".