Vietnam Airlines completes 2016 business plan

However, the carrier said that with the budget carriers continuously expanding their operations on both international and national routes, the competition had intensified.

In the domestic market, the firm supply was up 32% in 2016 compared with 2015, but the purchasing power increased only 14%, bringing down the average revenue of all airlines by 12%.

Meanwhile, the budget airlines expanded their operation to other regions, including Southeast Asia and Northeast Asia, marking a 14% rise in the market share from 8% in 2015.

Vietnam Airlines said the overload at airports, especially at Tan Son Nhat International Airport in HCM City, had resulted in an increase of 1,392 flying hours, incurring an additional cost of VND188 billion to the airline.

The firm predicted high growth in the aviation market this year with 23.6 million international visitors and 31.6 million domestic visitors, a 14.7% and 12.1% increase, respectively, when compared with last year.

However, Vietnam Airlines said there would be a lot of challenges, especially in the plan of repairing Noi Bai and Tan Son Nhat international airports, which may reduce their capacity to 70%. Noi Bai Airport will reduce from 35 flights per hour to 22-24 flights; meanwhile Tan Son Nhat Airport will scale down from 40- 42 flights per hour to 28-30 flights. Therefore, airlines will have to restrict 15 percent of the total flights arriving and landing in the airport in the day.

According to the business report of Vietnam Airlines, the corporation operated 138,764 flights last year, up 6.4% compared with the target for the year.

The 2016 aviation market’s growth rate was 25.7% higher than that of 2015, in which international market increased by 17%, while the domestic market rose 33%.