Resumption of int’l flights to help Vietnamese airlines cut losses, increase revenue
The international aviation market is expected to see a slow recovery depending on the pace of relaxation of COVID-19-prompted travel restrictions around the world.
Hanoi (VNA) – The international aviation market is expected to see a slow recovery depending on the pace of relaxation of COVID-19-prompted travel restrictions around the world.
Facing unpredictable pandemic changes in the aviation market, Vietnamese airlines have built plans for different scenarios of the international market.
International routes generate 65% of revenue
According to the Civil Aviation Authority of Vietnam (CAAV) statistics, as of the end of June, four Vietnamese carriers (Vietnam Airlines, Vietjet Air, Bamboo Airways and Pacific Airlines) were operating 68 international routes connecting Vietnam and 16 countries/territories.
The recovery of the international market holds a special significance for Vietnam Airlines, as regular international routes generated up to 65% of the national flag carrier’s revenue before the COVID-19 pandemic, according to Vietnam Airlines CEO Le Hong Ha.
He added that the resumption of international flights also allowed the carrier to optimise its fleet, which is the largest in Vietnam. The carrier operates more than 100 aircraft of various types, from short-to-medium-range narrow-body aircraft like Airbus A321neo to long-range wide-body jets such as Boeing 787 and Airbus A350.
Vietnam Airlines has resumed flights to 15 countries/territories (the UK, France, Germany, Australia, the US, Japan, the Republic of Korea, Taiwan, Hong Kong, Thailand, Malaysia, Singapore, Laos, Cambodia, and India) in the first six months of 2022 and is ready to immediately resume flights to China, Myanmar and Russia when conditions permit. A total of 35 international routes had been restored, equal to 53% of the number in 2019.
From July, Vietnam Airlines will re-open four more international routes, raising the number to 39, or 60% in 2019.
The national flag carrier hopes to restore the pre-pandemic frequency on key routes to Japan, the RoK and Australia in November 2022 and on all routes by the end of 2023.
“The gradual restoration of international flights creates the chance for Vietnam Airlines to enhance the effective use of resources, raise revenue, improve business operation results and cut loss towards earning profit again in the following years,” Ha said.
In the early days of July, Vietjet also officially opened two direct services from Hanoi to Nagoya and Fukuoka in Japan, and another from Hanoi to Busan (the RoK).
In particular, Vietjet Air has been granted permission to launch more than 20 new routes from Hanoi, Ho Chi Minh City, Da Nang and Phu Quoc in Vietnam to Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata and Gaya in India. At the same time, the carrier also increased flight frequency on the routes to New Delhi and Mumbai right in July.
Difficulties in key markets
Many countries are cautious about opening their borders to visitors, given the appearance of new SARS-CoV-2 sub-variants and the weakening efficacy of COVID-19 vaccine.
Vietnam Airlines CEO Ha forecast that most travellers will still be businesspeople, experts or people returning to their home country, while the number of tourists, who used to account for up to 90% of air travel, will be yet to return to the pre-pandemic level.
As such, cargo transport is expected to continue playing an important role, Ha said.
In such circumstances, Vietnam Airlines will build plans for different scenarios in the international aviation market depending on the level of border opening and relaxation of immigration and quarantine policies.
CAAV Director Dinh Viet Thang also expressed concern about the difficulties in restoring international air routes to key markets.
For example, the RoK still limits the number of flights. At the same time, entry conditions are complicated and China continues to pursue a “zero-Covid” policy, with only two flights from Vietnam allowed each week.
Taiwan and Japan are only opening their borders step by step.
“The target in the last six months of this year is to restore to the maximum flights to Taiwan, Japan and the RoK, and to raise the number of flights to China to about 30% of the pre-pandemic level,” Thang said.
In its latest report, the International Air Transport Association (IATA) estimates that around 4 billion people will travel by air in 2024, up 3% from 2019 before the pandemic. Nevertheless, international air transport will recover slower than domestic air travel, mainly depending on the relaxation of travel restrictions in countries. However, Asia-Pacific lags in the recovery as China, a major market, still keeps travel restrictions in place./.
Facing unpredictable pandemic changes in the aviation market, Vietnamese airlines have built plans for different scenarios of the international market.
International routes generate 65% of revenue
According to the Civil Aviation Authority of Vietnam (CAAV) statistics, as of the end of June, four Vietnamese carriers (Vietnam Airlines, Vietjet Air, Bamboo Airways and Pacific Airlines) were operating 68 international routes connecting Vietnam and 16 countries/territories.
The recovery of the international market holds a special significance for Vietnam Airlines, as regular international routes generated up to 65% of the national flag carrier’s revenue before the COVID-19 pandemic, according to Vietnam Airlines CEO Le Hong Ha.
He added that the resumption of international flights also allowed the carrier to optimise its fleet, which is the largest in Vietnam. The carrier operates more than 100 aircraft of various types, from short-to-medium-range narrow-body aircraft like Airbus A321neo to long-range wide-body jets such as Boeing 787 and Airbus A350.
Vietnam Airlines has resumed flights to 15 countries/territories (the UK, France, Germany, Australia, the US, Japan, the Republic of Korea, Taiwan, Hong Kong, Thailand, Malaysia, Singapore, Laos, Cambodia, and India) in the first six months of 2022 and is ready to immediately resume flights to China, Myanmar and Russia when conditions permit. A total of 35 international routes had been restored, equal to 53% of the number in 2019.
From July, Vietnam Airlines will re-open four more international routes, raising the number to 39, or 60% in 2019.
The national flag carrier hopes to restore the pre-pandemic frequency on key routes to Japan, the RoK and Australia in November 2022 and on all routes by the end of 2023.
“The gradual restoration of international flights creates the chance for Vietnam Airlines to enhance the effective use of resources, raise revenue, improve business operation results and cut loss towards earning profit again in the following years,” Ha said.
In the early days of July, Vietjet also officially opened two direct services from Hanoi to Nagoya and Fukuoka in Japan, and another from Hanoi to Busan (the RoK).
In particular, Vietjet Air has been granted permission to launch more than 20 new routes from Hanoi, Ho Chi Minh City, Da Nang and Phu Quoc in Vietnam to Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata and Gaya in India. At the same time, the carrier also increased flight frequency on the routes to New Delhi and Mumbai right in July.
Difficulties in key markets
Many countries are cautious about opening their borders to visitors, given the appearance of new SARS-CoV-2 sub-variants and the weakening efficacy of COVID-19 vaccine.
Vietnam Airlines CEO Ha forecast that most travellers will still be businesspeople, experts or people returning to their home country, while the number of tourists, who used to account for up to 90% of air travel, will be yet to return to the pre-pandemic level.
As such, cargo transport is expected to continue playing an important role, Ha said.
In such circumstances, Vietnam Airlines will build plans for different scenarios in the international aviation market depending on the level of border opening and relaxation of immigration and quarantine policies.
CAAV Director Dinh Viet Thang also expressed concern about the difficulties in restoring international air routes to key markets.
For example, the RoK still limits the number of flights. At the same time, entry conditions are complicated and China continues to pursue a “zero-Covid” policy, with only two flights from Vietnam allowed each week.
Taiwan and Japan are only opening their borders step by step.
“The target in the last six months of this year is to restore to the maximum flights to Taiwan, Japan and the RoK, and to raise the number of flights to China to about 30% of the pre-pandemic level,” Thang said.
In its latest report, the International Air Transport Association (IATA) estimates that around 4 billion people will travel by air in 2024, up 3% from 2019 before the pandemic. Nevertheless, international air transport will recover slower than domestic air travel, mainly depending on the relaxation of travel restrictions in countries. However, Asia-Pacific lags in the recovery as China, a major market, still keeps travel restrictions in place./.