Is Vietnam’s aviation sector becoming too hot?

Minister of Transport Truong Quang Nghia’s view that it is necessary to tighten control over flight licensing to pave the way for development of other modes of transport has raised controversy.

Nghia said people now prefer traveling by air instead of railway, which has caused overloading at airports and made it difficult for the railway to attract customers.

In the immediate time, air carriers may have to cut down the numbers of flights on Tet days in order to ease the overloading. Analysts have warned that if this happens, the airfare will escalate.

is vietnam’s aviation sector becoming too hot? hinh 0
Head of the Central Institute of Economic Management (CIEM) Nguyen Dinh Cung said the state encourages healthy competition and in such conditions, it is unreasonable to think that the aviation sector has to grow at a rate that fits the readiness of the infrastructure.

He said competition is the driving force for development, and if railways wants to develop, it needs to offer good services and competitive ticket prices. It is a blunder to force air carriers to reduce the number of flights so that passengers have to shift to rail.

“It is passengers’ right to choose to travel by air or by rail. MOT must not make the decisions for them,” Cung said.

He said that it is the job of the state management agency to give forecasts about supply and demand, and to develop infrastructure so as to satisfy demand.

Nguoi Lao Dong quoted an aviation expert as saying that the hot development of the Vietnam’s aviation sector in recent years is small compared with the growth rates in the region and the world. The ratio of passengers traveling by air in Vietnam remains low.

A report shows that air carriers served 30 million Thai passengers on domestic flights in 2015, while Thailand’s population is 68 million. Vietnam served 22.5 million passengers while it has more than 90 million people. 

Vu Dinh Anh, a renowned economist, commented that the travel demand would be increasing on Tet days. Meanwhile, if air carriers reduce flights on the days, the airfare would be increasing as the supply is short.

Regarding the development of railroads in Vietnam, former Deputy Minister of Transport La Ngoc Khue said, “We have nearly forgotten about it”.

For many years, the railway sector has been serving passengers with infrastructure that is one hundred years old. 

Experts said instead of trying to save the railway sector by scaling down the aviation sector, it would be better for the transport ministry to have reasonable policies to encourage its development.


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