Vietnamese aviation industry dejected as COVID-19 returns
The second wave of COVID-19 that began at the end of July, the peak summer travel period, has disillusioned airlines that had earlier begin to hope for a recovery.
After the first wave was controlled by the end of April they gradually increased operations on domestic routes to somewhere approaching normalcy.
They were very hopeful of offsetting the earlier losses during the peak July-September travel season, but the fresh wave has dashed those expectations.
According to the Civil Aviation Authority of Vietnam (CAAV), between July 19 and August 18 the five domestic carriers, Vietnam Airlines, Vietjet, Bamboo Airways, Pacific Airways, and VASCO, operated only 16,400 flights, down 33 percent from the previous month and 45% from the same period last year.
Vietnam Airlines' schedule was nearly 40% lighter at 4,300 flights. Vietjet Air’s was down 31% at 5,700.
Bamboo Airways, Pacific Airways and VASCO’s were down 17%, 15% and 43% month-on-month.
A decrease in demand also dragged down fares, with round-trip tickets between Hanoi and HCM City at the end of September priced at only VND1.2 million (US$52), down two or three times from early July.
General Director of Vietnam Airlines Duong Tri Thanh forecast the total number of domestic flights in the last five months of the year to be only 70% of last year’s.
For the full year the number could be 30-40% lower as could fares, he said.
To improve cash flow, airlines have to sell tickets for Tet (Lunar New Year) one month earlier than normal and offer a lot of discounts.
The Vietnam Aviation Business Association has called on the Government to offer airlines credit worth VND25-27 trillion (US$1.07 billion-1.16 billion) at preferential interest rates for three- or four-year terms.
It was one of the recommendations it made to the Government recently to stimulate the sector that is facing a severe downturn due to the pandemic.
It also called for extending the waiver and reduction of aviation service charges until the end of 2021 and cutting all airport service charges by 50%.
The association also petitioned Prime Minister Nguyen Xuan Phuc to allow resumption of flights to countries that have controlled the COVID-19 outbreak and allowing foreign tourists to enter Vietnam if they comply with safety requirements.
The International Air Transport Association has said the Vietnamese aviation industry will only return to last year’s levels by 2024.
Vietnamese airlines would suffer estimated losses of more than US$4 billion this year, it said.