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Wednesday, June 19, 2024

Vietnamese air carriers seen recovering fully by end-2024

The Saigon Times

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HCMC – The Civil Aviation Authority of Vietnam (CAAV) has predicted that the nation’s aviation sector will fully recover by the end of this year, in line with broader Asia-Pacific expectations.

The International Air Transport Association (IATA) has envisioned a global aviation rebound by late 2024, with the Asia-Pacific region, including Vietnam, potentially being the slowest to rebound. The projections suggest the region could generate profits of around US$1.1 billion this year.

Vietnam’s domestic aviation market was already in full swing in 2023, while the international market is showing signs of recovery and growth. The CAAV said it is optimistic about a complete recovery in the Vietnamese aviation market by year-end.

The number of air passengers this year is projected to exceed 84 million, a 15% increase against 2023 and a 6% rise compared to the 2019 level. Domestic air travelers are expected to grow by over 3% to 41.5 million, and international passengers are projected to increase by 16% to 43 million.

However, challenges remain for the domestic aviation industry in 2024, including concerns about inflation, exchange rate risks, tight monetary policy in certain countries, potential fuel price hikes due to conflicts in the Middle East, and a shortage of high-quality labor.

The recent recall of aircraft engines by U.S. aerospace manufacturer Pratt & Whitney has created a shortage of fleet resources, directly affecting operational plans and expansion efforts for Vietnamese airlines. Infrastructure limitations also pose a challenge, as some domestic airports may struggle to accommodate the expected market recovery in 2024.

To address these issues, Vietnamese carriers are changing their plans to align with varying rates of recovery in different regions and markets. The CAAV recommended addressing infrastructure constraints and increasing capacity on busy routes.

Government initiatives are encouraged to promote development, including policies aligned with market forecasts, tax reductions, and fee waivers until the end of 2024. Collaboration with international aviation authorities is also suggested to enhance supply capabilities and streamline operations at international airports.

In 2023, the Vietnamese aviation market saw robust growth, with 74 million passengers transported, up by 34.5% over 2022 and representing 93.6% of the pre-pandemic level in 2019. International passenger transportation also soared to 32 million passengers, an increase of 1.7 times compared to 2022 and 77% of the 2019 figures.

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