2021 will still be a difficult year for the aviation industry as it has no room for further recovery until international flights are reopened (Photo: VNA) The recentrecovery was thanks to a complete restoration of domestic routes andthe continued good performance of freight transport.
As ofNovember, the total number of flights decreased by 23 percent compared to thesame period last year but strongly recovered from a decrease of 92 percent inApril.
The mosteffective route was HCM City - Hanoi with 540 flights per week, reachingan occupancy rate of about 90 percent.
However,commenting on the prospects of the aviation industry, Mirae Asset SecuritiesVietnam Co (MASVN) believes 2021 will still be a difficult year for theindustry as it has no room for further recovery until international flights arereopened.
MASVNexplained the current low fares are helping push up the demand for air travelon domestic routes. However, airlines can’t further cut the fares as they aretoo low. If airlines continue to reduce fares, it will be difficult to makeprofits.
"In thecontext of a fiercely competitive domestic market, we believe that the businesssituation of Vietnamese airlines will hardly improve further until theinternational routes are reopened," MASVN experts told vietnamfinance.vn.
With onlydomestic routes operating, the competition in the aviation industry next yearwill be fiercer. All aircraft are now converging on domestic routes to improvecash flow. Meanwhile, Vietjet Air has received 11 new aircraft, bringing thetotal number of aircraft in operation to 88. Bamboo Airways reducedtwo A320s but received four small aircraft E195, bringing its fleet to 26.
In addition,the aviation industry also has to compete against other transportation means likepassenger cars and trains which have also applied fare discounts from 15 percentto 50 percent.
MASVNexperts estimated it would take about four months to vaccinate 30 percent ofthe US population and it was the minimum rate required to fight the COVID-19pandemic. For other countries less developed than the US, the time to hit30 percent will be longer.
"Internationalflights are likely to reopen as soon as the pandemic is repelled and thetransport of international passengers will begin to recover gradually from thattime. However, we expect the recovery rate will be slow, caused by isolationrules and restricted tourism demands in the wake of difficulties due to the pandemic,”the experts said./.
VNA
