At a recent seminar held to discuss opening the market mechanism and supporting the local aviation industry organised by the Vietnam Aviation Business Association (VABA), representatives of aviation and tourism businesses said that amid uncertainties such as the pandemic, geopolitical issues, the slow recovery of international tourism, high fuel prices, and interest rates, local airlines are facing plenty of difficulties and challenges. As a result they continue to need support from the State.

Businesses therefore proposed increasing the ceiling of domestic airfares and moving to remove this price bracket in the law.

"Fragile" resilience

Nguyen Manh Quan, general director of Bamboo Airways, stated that although the country opened its door to trading activities from March, 2022, it has yet to fully achieve the tourism and aviation recovery indicators as expected.

Quan pointed out the main reason why traditional aviation markets both to and from the country have not yet opened or are very cautious, such as China and Japan, is that the people in these nations remain afraid to travel abroad and choose instead to travel domestically for safety reasons and income factors.

While the aviation market revenue from the Chinese market accounts for 30% of the total market, it is still frozen.

A report compiled by the International Air Transport Association (IATA) shows that the speed of aviation recovery between regions in the Asia-Pacific was at the slowest rate compared to other regions, according to Trinh Ngoc Thanh, deputy general director of Vietnam Airlines.

It is therefore expected that the aviation market will recover by the end of 2024 compared to before the pandemic outbreak in 2019, he went on to say.

Meanwhile, Bui Doan Ne, vice chairman of the VABA, said that although the Vietnamese aviation industry is facing numerous difficulties and huge challenges, there remains a significant opportunity for recovery and development as the nation has the opportunity to exploit vast international markets.

Can Van Luc, director of BIDV Research and Training Institute, said that the reopening of the air transport market in 2022 helped passenger transport revenue quickly recover. However, the recovery speed of the industry no longer depends on the extent and wide opening roadmap of China and some other countries.

Therefore, he anticipates that the resumption of tourism and air travel will boost revenue growth of the whole industry in the year ahead.

Proposal for tourist visa exemption to rise from 15 days to 30 days

Regarding visa policies, Dr. Can Van Luc said that international tourists to the country are recovering more slowly than expected.

Even this year the tourism industry only aims to attract eight million international visitors, while in 2019 it lured 18 million.

“That data indicates that it is still very difficult to restore the international tourist market for Vietnam. Expanding the visa-free policy for international tourists to Vietnam is a key bottleneck to be removed at present," Dr. Luc emphasised.

Furthermore, aviation and tourism expert, Dr. Luong Hoai Nam said that once the COVID-19 pandemic situation had been gradually contained, business representatives at many conferences had expected that Vietnam would reopen the tourism market to match or even surpass Thailand.

However, Dr. Nam assessed that the reality is very different, before the pandemic, international tourists to the country were half of that of Thailand, with the figure in 2022 being only a third with 3.6 million visitors compared to the 10.5 million of Thailand. Moving forward, Vietnam has also set the target of welcoming tourists to be at only a quarter of that of Thailand.

According to details given by experts, visa-free policies for international tourists remains the biggest barrier for Vietnamese tourism development.

“The reality has not changed much. While 70% to 80% of international tourists go by plane, so tourism is difficult, aviation also has little chance of recovery," Dr. Nam analysed.

Bamboo Airways leaders also agreed with the proposal that the Government should first adopt a fresh visa policy for international tourists. This could include extending the tourist visa exemption period from 15 days to 30 days and expanding the applicable countries to this policy.

Proposing solutions to solve immediate difficulties for businesses, Nguyen Manh Quan, general director of Bamboo Airways, put forth three groups of solutions. This includes improving destination competition, supporting the tourism industry through visa policy, and removing the price ceiling in the long term while adjusting the price ceiling in the short term.

Expert Tran Tho Dat suggested that the country should look at the experiences of other places to ensure long-term and sustainable development of local airlines.

Source: VOV