On average, over the past few years, the industry has contributed over US$6 billion to Vietnam’s gross domestic product (GDP) and generated more than 230,000 jobs throughout the country.
Director General of the International Air Transport Association (IATA) Toney Tyler recently announced that from 2008-2013 the international and domestic passenger traffic of the industry grew at an astonishingly fast pace, nearly doubling.
Developing key economic sector
According to a global competitiveness report released at the recent World Economic Forum, Vietnam currently ranks 82nd in the world and 6th in ASEAN in terms of infrastructure index.
These statistics clearly substantiate the significant investment in the Vietnamese aviation sector is paying off, with the industry’s aviation prestige in the eyes of the world on a definite upward trend. Official statistics also show that last year around 4.6 million foreign visitors flew to Vietnam, and spent more than US$5 billion while traveling in the Southeast Asian nation. According to the statistics, tourism industry revenues have also been on a skyward rise trailing the aviation industry.
Currently 26 airports including the international airports in Hanoi and HCM City as well as Long Thanh Airport, are undergoing massive renovation and expansion, which bodes well for both the aviation and the tourism industry.
Experts say that although past achievements in the aviation industry may not have fully met with expectations, the nation is beginning to see big dividends and the investment is paying a high return to the economy in terms of tourism development and FDI attraction.
In particular they cite the success of national carrier, Vietnam Airlines (VNA). The airline has achieved an international reputation for its flight safety and security track record, which has opened up the receptiveness of nations to the airlines expansion of air routes.
Pham Ngoc Minh, VNA Director General says VNA plans to continue expanding markets.
“In addition to promoting domestic and Indochinese air routes, VNA has opened many direct air routes to Europe, Australia and North-East Asia,” Minh said, adding “These routes have directly resulted in increased tourism, investment, trade and integration.”
VNA’s contributions to the State Budget has been steadily increasing each year as well from more than VND1.643 trillion in 2008 to VND3.116 trillion in 2013.
In the first half of this year, passenger freight reached 16.3 million, up 13% and goods freight hit 372,000 tonnes, up 24%, which clearly evidences the direct correlation between the airlines expansion and trade enhancement, Minh said.
Obstacles in visa procedures
Deputy Minister of Culture, Sports and Tourism Ho Anh Tuan in turn says the aviation sector plays a vitally important role in tourism development. Travelling by air is the most advanced tourism method.
Nguyen Quoc Ky, Vietravel Director General, echoing Tuan’s sentiments says half of its customers travel by air. Thus the aviation and tourism sectors are closely intertwined and should cooperate with each other for mutual benefit.
To further promote the development of the tourism sector, experts propose that the Government layout a roadmap for accelerating equitisation and privatising airports.
Further, Vietnam should simplify visa procedures and enhance self-services according to IATA’s travel easy programme to attract more tourists, they say.
Lai Xuan Thanh, Director of the Civil Aviation Authority, says Vietnam has declared liberalisation and opened its doors to aviation to create a healthy competitive environment. However, the most pressing need is to attract more investment into infrastructure.
Vietnam’s aviation is a “pioneer” and blazing the pathway for the elevation of trade and investment cooperation among domestic regions and between regional and international countries, says Nguyen Ngoc Dong, Transport Deputy Minister.
"Vietnam Airlines has been the instrumental leading unit connecting inland areas and between Vietnam and other countries as well as the leader in promoting Vietnam’s culture to the world. The Government will forever provide a niche in the aviation sector for national flag carrier to operate effectively and successfully." Dong notes.