Vietnam’s aviation market: attractive but risky

Vietnam has great potential for airlines, but it is not easy to access it. Many players have had to give up the game.

Vietnam’s aviation market in recent years has witnessed the departure of a lot of carriers, including Indochina Airlines, Mekong Air, Trai Thien Air Cargo and Blue Sky Air.

Vietnam’s aviation market: attractive but risky



Just some days ago, Vinpearl Air belonging to Vingroup also announced that it would leave while their documents for applying to provide commercial flights were still on the table of state management agencies.

Prior to that, the air carrier of the dollar billionaire Pham Nhat Vuong stated that it would take off in July 2020.

The departure of Vinpearl Air, as commented by analysts, showed that it is not easy to make money in the aviation industry as people think.

The departure of Vinpearl Air, as commented by analysts, showed that it is not easy to make money in the aviation industry as people think.

The premature deaths of other airlines showed the same. Indochina Airlines and Mekong Air flew for 1-2 years before they had to leave. Trai Thien Air Cargo got the license, but has not made any activities. Meanwhile, the name Blue Sky Air seems to have fallen into oblivion.

 


Jetstar Pacific, Vietnam’s first budget airline, also met with big difficulties with the loss of up to VND2 trillion. Only after it joined Vietnam Airlines and underwent the reshuffle had it begun making profit.

Analysts said the poor infrastructure which cannot catch up with the aviation market development, the lack of human resources and the stiff competition among market players are the main reasons that have made airlines decide to give up the game.

The Ministry of Planning and Investment (MPI) also said it is easy to raise funds to set up an airline and sign contracts on purchasing airplanes, but it is very difficult to recruit staff as Vietnam is seriously lacking manpower.

The civil aviation industry is developing rapidly. Some airlines are also developing too rapidly. They try to develop the fleets while they still are not well prepared in resources and manpower. This has led to a ‘qualified worker crisis’ with the serious shortage of pilots and technicians.

According to the International Air Transport Association (IATA), Vietnam’s aviation industry is growing rapidly and may become the 15th largest market in the world by 2035.

It is expected that the number of passengers to go through airports in Vietnam would reach 185 million by 2025. Five domestic airlines and 70 international airlines are exploiting the market.

Nguyen Ngoc Dong, Deputy Minister of Transport, said the aviation industry maintained a high growth rate of 15-17 percent over the last 10 years.

If everything goes as planned, Vietnam would have eight airlines by the end of 2020, including Vinpearl Air, with 380 airplanes.

Linh Ha 

Vietnam Airlines launches Da Nang-Shanghai route

Vietnam Airlines launches Da Nang-Shanghai route

Vietnam Airlines on January 19 officially launched a non-stop route connecting the central coastal city of Da Nang and China’s Shanghai.

Vietnam Airlines deploys self-service kiosks to speed up check-in services

Vietnam Airlines deploys self-service kiosks to speed up check-in services

The national flag carrier Vietnam Airlines announced on January 14 that all passengers flying with the airline will be able to carry out self-service check-in service at kiosks when departing from Hanoi, Da Nang, Nha Trang, and HCM City.

 
 

Other News

.
Petrolimex pushes for PGBank-HDBank merger before Aug 31
Petrolimex pushes for PGBank-HDBank merger before Aug 31
BUSINESSicon  27/06/2020 

Petrolimex, which holds a 40% stake in the Petrolimex Group Commercial Bank (PGBank), sought to complete the merger between PGBank and the HCMC Development Bank before August 31, said the Vnexpress website.

WB debars Vietnamese firm for collusive and fraudulent practices
WB debars Vietnamese firm for collusive and fraudulent practices
BUSINESSicon  27/06/2020 

The World Bank Group has announced the seven-year debarment of Vietnam-based Sao Bac Dau Technologies Corporation (SBD) in connection with collusive and fraudulent practices under the Danang Sustainable City Development Project

Coca-Cola suspends social media advertising despite Facebook changes
Coca-Cola suspends social media advertising despite Facebook changes
BUSINESSicon  27/06/2020 

The company condemns racism and seeks more accountability from Facebook and other platforms.

Hanoi attracts US$17.6 billion for 229 projects
Hanoi attracts US$17.6 billion for 229 projects
BUSINESSicon  27/06/2020 

Hanoi is going to present investment certificates for 229 projects with a total value of US$17.6 billion and sign 38 memoranda of understanding worth a combined US$28.6 billion, according to the Tuoi Tre Online website.

Vietnam prepares to resume international flights
Vietnam prepares to resume international flights
BUSINESSicon  27/06/2020 

It is still unclear when Vietnam will reactivate international flights and reopen its market to foreign travelers, but agencies and travel firms all are making hectic preparations.

Banks’ support desired for mobile payments
Banks’ support desired for mobile payments
BUSINESSicon  26/06/2020 

New approaches, especially regarding activities of banks, are required to boost the reach of mobile money agents and expand financial inclusion in Vietnam.

Authorities get to grips with new bad debt mountain
Authorities get to grips with new bad debt mountain
BUSINESSicon  27/06/2020 

A spike in the amount of bad loans sitting in banks’ books has triggered Vietnamese authorities to seek new paths to recovery,

Debt limit to be adhered to despite bumps in road
Debt limit to be adhered to despite bumps in road
BUSINESSicon  26/06/2020 

In spite of a dent in state budget revenue and a rise in spending this year causing a big fiscal deficit, the government will be able to retain the country’s public debt situation, ensuring national financial security.

Coronavirus: Qantas to axe 6,000 jobs due to pandemic
Coronavirus: Qantas to axe 6,000 jobs due to pandemic
BUSINESSicon  26/06/2020 

The airline says the collapse in billions of dollars of travel revenue means it has "little choice".

Bayer to pay $10.9bn to settle weedkiller cancer claims
Bayer to pay $10.9bn to settle weedkiller cancer claims
BUSINESSicon  26/06/2020 

The chemical giant is settling almost 100,000 US lawsuits from users of its popular Roundup herbicide.

Olympus quits camera business after 84 years
Olympus quits camera business after 84 years
BUSINESSicon  26/06/2020 

Once a huge camera-maker, it is looking to carve off that part of its business and focus elsewhere.

COVID-19-induced uncertainty continues to drag on emerging East Asian bonds
COVID-19-induced uncertainty continues to drag on emerging East Asian bonds
BUSINESSicon  26/06/2020 

The coronavirus (COVID-19) pandemic continues to drag on local currency bond markets in emerging East Asia, including Viet Nam, as investment sentiment globally and in the region wane and containment measures limit economic activity.

Finance ministry says public investment funds borrowed from abroad must be disbursed quicker
Finance ministry says public investment funds borrowed from abroad must be disbursed quicker
BUSINESSicon  26/06/2020 

Loans borrowed from abroad for public investment must be disbursed quicker if Vietnam is to recover economically from the impacts of the coronavirus pandemic, according to the Ministry of Finance.

VEPR urges tax policies for FDI to be revised to prevent tax avoidance and evasion
VEPR urges tax policies for FDI to be revised to prevent tax avoidance and evasion
BUSINESSicon  26/06/2020 

Vietnam needs to revise tax and land policies for foreign direct investment (FDI) companies to ensure a level playing field for businesses.

Process supervision can end licence limbo
Process supervision can end licence limbo
BUSINESSicon  26/06/2020 

Along with luring in new foreign investment inflows, one of the major tasks for the government is to tackle oversights in regards to foreign-invested projects without construction licences.

Vietnam's logistics service industry ready for opportunities from EVFTA
Vietnam's logistics service industry ready for opportunities from EVFTA
BUSINESSicon  26/06/2020 

Vietnam’s logistics service industry is preparing infrastructure and techniques to grasp opportunities from the Europe-Vietnam Free Trade Agreement (EVFTA) to attract foreign investors with a wave of factories.

Vietnam Airlines to buy more aircraft despite big losses
Vietnam Airlines to buy more aircraft despite big losses
BUSINESSicon  26/06/2020 

The national flag air carrier is still moving ahead with its plan to buy 50 narrow-body aircraft, though it has reported a loss of VND2.6 trillion in Q1.

Vietnam's footwear firms forced to lay off workers due to Covid-19
Vietnam's footwear firms forced to lay off workers due to Covid-19
BUSINESSicon  26/06/2020 

The coronavirus pandemic has left tremendous impact on Vietnam's footwear industry, with the lack of production orders and the consequent drop in exports forcing them to lay off employees. 

PM approves suspension of Bac Van Phong SEZ plan
PM approves suspension of Bac Van Phong SEZ plan
BUSINESSicon  25/06/2020 

PM Nguyen Xuan Phuc has approved the suspension of a master plan to develop the Bac Van Phong special economic zone in Khanh Hoa Province until the National Assembly agrees to pass the law on special administrative and economic zones.

Orientations put Hanoi onto investment radar
Orientations put Hanoi onto investment radar
BUSINESSicon  25/06/2020 

Amidst the global trend of investment shifts, Hanoi is betting on new orientations and solutions to increase its appeal, expecting to open opportunities for international investors to venture further afield.

 
 
 
Leave your comment on an article

OR QUICK LOGIN