Vietnam's aviation market has been strongly affected by the COVID-19 outbreak (Photo: VNA) Hanoi (VNA) – Airlines in Vietnam are lookingat ways to overcome the impact of the COVID-19 outbreak after seeing declining passengernumbers.
Double-digitdeclines
The Civil Aviation Authority of Vietnam (CAAV)reported that airports in the country served nearly 8.1 million passengers inFebruary, down 11.6 percent from the same period last year. They included 2.4million foreigners and 5.7 million domestic passengers, down 29.8 percent and0.7 percent, respectively
Also last month, Vietnamese airlines transported3.7 million passengers, falling 13.7 percent year on year. The number offoreign and domestic passengers respectively decreased 39.5 percent and 0.7percent.
The CAAV attributed the double-digit fall in theVietnamese aviation market after many years of strong growth to the directimpact of the COVID-19 outbreak.
Vietnam Airlines said for every week of theepidemic, the national flag carrier is losing 200 – 250 billion VND (8.7 – 10.8million USD). Its revenue from both passenger and cargo transportation dropped20 – 25 percent in the first half of February.
According to the CAAV, China, which has recordedthe biggest number of COVID-19 cases, accounts for 26.1 percent of thepassenger and cargo volume that domestic carriers transport to and frominternational destinations.
Before the acute respiratory disease broke out,14 airlines were operating 72 routes between Vietnam and China. The suspensionof flights to China has caused Vietnamese airlines to lose 400,000 passengersper month. They have also had to pay more for ticket exchanges, cancellations,and sterilisation, the authority said.
In a report assessing the outbreak’s impact onthe economy, Dr Can Van Luc and analysts from the BIDV Training and ResearchInstitute said air transport will be hit the hardest since foreign passengersusing Vietnam’s air transport services account for more than 79 percent oftotal international arrivals in the country. In particular, Chinese visitorsarriving by air make up 70 percent of all Chinese visitors to Vietnam.
The research division at SSI Securities JSC alsorated the aviation sector’s short-term outlook as “negative”, noting that allairlines could be influenced by the epidemic due to lower travel demand,especially from China. In 2019, Chinese tourists accounted for 32.2 percent ofthe 18 million foreign travellers to Vietnam.
Seekingsolutions
Since late February, carriers like VietnamAirlines, Vietjet Air, Jetstar Pacific and Bamboo Airways have been offeringdiscounts on domestic and international routes.
Notably, people now can easily buy tickets forHanoi – Ho Chi Minh City flights for only one-third of train tickets. They canalso buy cheaper tickets on international routes.
Economic experts said the airlines made the movewith a view to attracting passengers, stimulating travel demand and maintainingtheir operations.
Lai Xuan Thanh, Chairman of the Board ofDirectors of the Airports Corporation of Vietnam (ACV), said the ACV will needto adjust its business plan and work with airlines to seek ways to stimulatedemand.
After the SARS outbreak in 2003, the aviationsector learned that overdependence on a single market had a considerableinfluence on airlines if that market encountered problems. Therefore, thesector has worked to restructure its markets.
Facing the COVID-19 outbreak, the ACV is alsocoordinating with relevant parties to carry out restructuring, Thanh added.
Vietnam Airlines has announced that it isoffering its narrow-body aircraft (A321) and wide-body ones (A350-900 andB787-9/10) for lease.
Meanwhile, Vietjet Air is launching five directroutes from Da Nang, Hanoi and HCM City to India.
Airlines are working to open new domestic routes,sell tickets at lower prices to attract passengers, while ensuring their planesdo not stand idle to reduce expenses, the CAAV said.
It has recommended carriers negotiate withaircraft renters to return some planes and with manufacturers to extend deadlinesfor receiving new planes.
Airlines have also submitted reports to theCAAV, the Ministry of Transport and the Government so that detailed plans canbe made to help revive the market in late 2020 and the next two years after theoutbreak is contained./.
VNA
