One of the interesting things about airline watching is the reluctance of many carriers to predict when they will fully recover to pre-COVID levels. Given what has happened in the last three years, that’s probably hardly surprising, with the industry well aware of how quickly it can be derailed.
While not an airline, the Civil Aviation Authority of Vietnam (CAAV) has a good handle on the state of the industry in Vietnam. Last week it came out with an announcement that predicted Vietnam’s aviation market will “fully recover from the impacts of COVID-19 lockdowns by the end of this year.”
Vietnam set to exceed 2019 levels
As reported by VN Express, the CAAV believes passenger traffic will increase by 45% from 2022, reaching 80 million this year, which is a 1% growth over the pre-Covid 2019 numbers. With international air cargo showing signs of slowing down, it is a little surprising that the CAAV predicts the sector to grow by 15% to 1.44 million tons in 2023, a 14.8% increase from 2019.
In most parts of Asia, domestic air travel has managed to survive the pandemic in reasonable shape, and it has been the lack of international travel that has held back the region’s recovery. In 2023 the CAAV forecasts 34 million passengers from Vietnam will travel internationally, which is triple the volume from last year. In the domestic market, the authority said it is “already seeing high growth,” although the international market is still “recovering and could reach 2019 levels by the end of this year.”
While the overall aviation recovery is gathering pace in Vietnam, the CAAV notes some major challenges that negatively impact the sector. Firstly it mentions a lack of major airports in Vietnam and that all those are facing significant capacity constraints, which may limit growth opportunities.
The other possible negatives are the fluctuating, high fuel prices and the continuing effects of the Russia-Ukraine crisis on global aviation and commerce. There are also concerns in Asia about the return of COVID and that global and local economic difficulties might hamper the growth of demand, especially among key tourist markets such as South Korea and Japan.
The resumption of air services with China is seen as a positive sign for growth, although VN Express said it would take longer than this year for economic and travel activities to recover to pre-pandemic levels in the aviation sector. As a comparison, the International Air Transport Association (IATA) predicts global international traffic will reach 80% of 2019 levels this year, with the Asia-Pacific region set to recover the slowest.
Vietnam Airlines is making up ground in China
Also, last week, Vietnam Airlines announced the resumption of five more routes to China, which means that nine of its ten pre-pandemic routes will be back in service. Vietnam’s flag carrier is resuming thrice-weekly services between Hanoi and Beijing in March and increasing the frequency of flights from Hanoi and Ho Chi Minh City to Guangzhou and Shanghai.
From April, Vietnam Airlines plans to reopen four routes between Da Nang and Guangzhou, Shanghai and Chengdu, as well as between Hanoi and Chengdu. In another sign of the return of the China market, in September, the airline plans to operate widebody Airbus A350 and Boeing 787 airliners on its routes between Hanoi and Beijing and between Hanoi and Ho Chi Minh City and Shanghai.
Despite the slower-than-expected growth from China expressed by the CAAV, Vietnam Airlines expects passenger numbers between Vietnam and China to reach around 80% of the 8.1 million recorded in 2019.
Cre: Simple Flying
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