Vietnam aviation industry needs more 3 years to recover
Vietnam aviation industry needs more 3 years to recover
Local aviation companies are continuing to face a challenging time ahead.
Vietnam’s aviation industry is predicted to take three years to return to the pre-Covid level of 2019, according to Deputy Head of the Civil Aviation Authority of Vietnam (CAAV) Pham Van Hao.
The International Civil Aviation Organization forecasts two scenarios for the world’s aviation industry. Photo the courtesy of Vietnam Airlines
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There were two scenarios forecast by the International Civil Aviation Organization (ICAO) for the world’s aviation industry, Mr. Hao said at the national conference under the theme “Overcoming crisis, developing Vietnam's aviation sustainably” held recently in Hanoi.
In the first scenario, the aviation industry will take a V-shaped recovery, plunging to the bottom and then rebounding strongly. In the second scenario, it will be a U-shape convalescence, in which the industry will sink to the bottom and remain there for 3-5 months, along with economic downturn. As a result, the aviation market will decline 48-71% depending on the situation of the pandemic.
Mr. Hao predicted that the first scenario will happen to Vietnam aviation. The CAAV, after consulting market research firms, will submit the schedule on reopening borders for international flights to the government. The reopening, however, would not be carried out broadly, taking into consideration of disease prevention measures.
Ms. Ho Ngoc Yen Phuong, Vietjet’s Deputy General Director, said the low-cost air carrier suffered a nine-month cumulative loss of VND2.4 trillion (US$103.4 million). She also proposed the government to direct credit institutions to offer low-interest loan to the carrier in a term for 3-5 years.
Mr. Nguyen Tien Hoang, deputy head of Planning and Development Department at Vietnam Airlines (VNA), said that Vietnam's aviation loss was estimated at US$4 billion this year.
"The national flag carrier is likely to be the hardest hit by Covid-19 among others, making a lost of about VND14 trillion-VND15 trillion (US$603.5 million-$646.6 million) this year.
In the context that the purchasing power is weak and inbound tourism still suspended, the airlines have dropped airfares to stimulate domestic travel.
The VNA predicts that the economic downturn and the fear of catching coronavirus on flights will hindrer the recovery of the aviation industry.
Deputy Minister of Transport Le Anh Tuan said that the government has paid great attention to the development of the aviation industry. In addition to financing or creating favorable mechanism to lure investment in infrastructure development, including transport infrastructure and air fleet expansion, the government has focused on building a legal framework to ensure the efficient operation of the industry.
