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Aviation sector: trying to survive the storm of 2020

2020 was a disastrous year for the aviation and tourism industries, which were hit hard by the Covid-19 pandemic.

Flight output in 2020 decreased by more than half compared with 2019, with only 424,000 flights provided, down by 548,000 flights, serving 66 million passengers, down by 43.5 percent.

 

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At Phu Bai International Airport

 

As a result, airlines took a loss of tens of trillions of dong. Vietnam Airlines, the national flag air carrier, incurred a combined loss of VND14.4 trillion and asked for a government bailout. Meanwhile, Pacific Airlines reported a loss of VND1.2 trillion.

As for the tourism sector, the pandemic wiped out $19 billion worth of revenue from travelers. Only 3.7 million travelers came to Vietnam, a sharp fall of 80 percent from 2019, while there were 56 million domestic travelers, a decrease of 34.1 percent.

Around 90-95 percent of 3,339 travel firms have suspended their operation. Many firms have gone bankrupt and others have shifted to other business. More than 30,000 accommodation facilities reported low room capacity of 20-25 percent. Many hotels were sold cheaply as they could not survive the difficulties.

Analysts warn that difficulties are still ahead, as no scientist can say for sure when the pandemic will be contained.

Struggling but optimistic

While businesses are complaining about difficulties, Trinh Van Quyet, president of FLC, the owner of Bamboo Airways, thinks differently.

“At this moment, if you still think about the damages caused by the pandemic, you will be ‘out of tune’ with reality,” he said.

 

Many promotion campaigns were launched to stimulate demand, including the ‘Time to discover Vietnamese beauty’ conference held on May 16 and the forum on ‘The strong rise of Vietnam’s airlines and the recovery of the national economy’ on May 30, as well as the ‘Fly to Con Dao to experience new tourism paradise’ conference on September 12 held by FLC.

 

In Quyet’s eyes, aviation and tourism are the two business sectors with the best potential for resilience and recovery.

The business fields suffered heavily from the three outbreaks, which led to a sharp fall in number of passengers. But they recovered strongly after the outbreaks were controlled.

Travel firms again received domestic travelers, while domestic flights were again full.

Many promotion campaigns were launched to stimulate demand, including the ‘Time to discover Vietnamese beauty’ conference held on May 16 and the forum on ‘The strong rise of Vietnam’s airlines and the recovery of the national economy’ on May 30, as well as the ‘Fly to Con Dao to experience new tourism paradise’ conference on September 12 held by FLC.

Quang Ninh provincial authorities spent VND100 billion in 2020 to stimulate domestic demand. Phu Quoc Island hired KOL to promote local tourism in a new and attractive way.

After outbreaks were controlled, the number of passengers increased. Thousands of flights recovered. After two lockdowns, airlines saw nearly 100 percent recovery on domestic air routes. Some airlines even opened new routes.

In late September 2020, Bamboo Airways began three direct routes from Hanoi, Vinh and Hai Phong to Con Dao Island.

A representative of Bamboo Airways said after every outbreak, the airline quickly recovered the entire domestic flight network. The number of flights provided by the carrier and the number of passengers were 10 percent higher than the same periods last year.

Meanwhile, Vietravel Airlines presented itself before the public on December 26. It decided to take off despite the pandemic. At first, the air carrier will focus on the domestic market with eight major air routes, commencing from January 2021.

Its CEO Vu Duc Bien told the local press that the air carrier plans to be profitable after two years.

Stepping forward and joining hands

An expert from the Vietnam Chamber of Commerce and Industry (VCCI) said it is difficult to approach clients if businesses act singlehandedly and is even more difficult to do this in the pandemic. Therefore, joining forces to co-develop is the best solution.

Quyet said that the cohesion among businesses has never been so strong.

In September 2020, in order to persuade HCM City people to travel and to attract people from other localities to HCM City, the Tourism Department decided to cooperate with 13 provinces in the Mekong Delta, five provinces in the eastern part of the southern region, eight provinces in the northwest, eight provinces in the northeast and five provinces in the central reigon.

Hanoi and Da Nang signed cooperation programs to stimulate travel demand.

Travel firms joined forces with each other to launch thousands of tours with discount rates of 30-50 percent. 

Ha Duy

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