With the witness of Vietnamese Communist Party Secretary General Nguyen Phu Trong and the US President Donald Trump, Vietjet Air and Bamboo Airways on February 27 signed contracts with Boeing to buy 110 aircraft worth $15 billion.
Prior to that, Vietnam’s airlines had signed other contracts with Boeing and Airbus. Existing air carriers want to buy aircraft to replace old ones and modernize their fleets, while new air carriers want modern aircraft to improve competitiveness.
According to the Civil Aviation Authority of Vietnam (CAAV), in 2018, Vietnam’s airlines served nearly 50 million passengers, up by 10.1 percent over 2017, and 400,000 tons of cargo, up by 27.2 percent.
Vietnam now has five air carriers, namely Vietnam Airlines, Vietjet Air, Jetstar Pacific, VASCO and Bamboo Airways.
Vietjet Air, the low-cost carrier, alone is now using 60 airplanes and it has ordered new aircraft in 2018-2019, about 100 a year.
The Vietnamese air transport market includes 63 foreign airlines from 25 countries and territories which provide routine flights to and from Vietnam.
The airlines, plus Vietnamese carriers, provide flights on 105 international air routes.
Regarding infrastructure, by the end of 2018, Vietnam had 22 airports, including nine international, and 13 domestic ones with limited infrastructure conditions.
Only large airports such as Noi Bai and Tan Son Nhat have logistics centers for air services. As a result, foreign freight and forwarding firms now operate in Vietnam, including DHL, FedEx and Kerry Express which have to build terminals of their own.
The white book about Vietnam’s logistics in 2018 showed that usage of aviation infrastructure for cargo transport was at a high level, averaging 15.6 percent per annum in 2011-2017. Cargo transport by air makes up 25 percent of Vietnam’s total import/export value.
The total air transport output in 2018 was estimated at 71.4 million passengers. According to the International Air Transport Association (IATA), Vietnam is the fifth fastest growing aviation market in the world in number of passengers, with a growth rate of 6.7 percent per annum.
Meanwhile,if the Prime Minister Decision No 236 released on February 23, 2018 is realized, Vietnam will increase the number of airports to 28, including 15 domestic and 13 international.
The figures show that infrastructure will continue to be under pressure, and the targeted fourth position in ASEAN in terms of transport output will be a very difficult task.