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INDUSTRY NEWS

Facts Of Vietnam Aviation Booming Industry!


Policies to facilitate newcomers in Vietnam’s aviation industry

National development plan
The Transport Ministry hopes the new regulations will help Vietnam meet the national aviation transport development plan till 2020 with a vision to 2030 ratified by the prime minister early this year, which makes the industry more attractive to private investors.

Under the plan, the number of aircrafts in the country will grow to more than 220  by 2020 and 400  by 2030, increasing by 70-100  compared to the previous plan. The aviation industry will also have 23 airports with an annual traffic of 144 million passengers by 2020 and 28 airports with an annual traffic of 308 million passengers by 2030.

The International Air Transport Association also estimated that between now and 2020, passenger transportation in Vietnam is expected to rise by 16 percent, and from 2020 to 2030, by 8 percent. Cargo transportation will increase by around 18 percent until 2020, and 12 percent between 2020 and 2030. The growth will make Vietnam the world's fifth fastest-growing aviation market by 2035.

Under the estimates, Vietnam will need at least 10 additional new airlines to meet the growing demand. The country has so far licensed five: Vietnam Airlines, Jetstar Pacific Airlines, Vietjet, Vietnam Air Services Company (VASCO) and Bamboo Airways.

Why Vietnamese Aviation Is Growing So Much?

The Vietnamese aviation industry has seen a strong growth of 17.4% over the past decade, making it one of the fastest growing aviation industries in the world. With companies like Bamboo Airways actively working to launch new airline services, and VietJet investing in an order of 325 new aircrafts, the aviation sector in Vietnam is looking to expand itself further in the next few years to come.

Tourism

In 2017 airlines in Vietnam carried 94 million passengers. Of these, 13 million were foreign. This means almost 14% of passengers were international visitors, while we can also assume that a fair number were domestic tourists. The tourism industry in Vietnam is rapidly expanding. In fact, 2017 saw a growth of 16% of the total number of passengers carried compared to 2016, and the numbers is expected to grow by a further 16% by 2020. With the number of passengers rising, airline companies will have to increase their fleet in order to keep up with the demands.

Airline Expansions

Almost all of Vietnam’s airlines are currently expanding. VietJet currently has 325 aircraft on order from Boeing and Airbus with a current fleet size of 56, this marks an almost 700% increase in the airline’s fleet size. However, VietJet isn’t the only carrier that is expanding. Air Asia is currently looking to increase its services to Vietnam, expanding new routes including flights from Kuala Lumpur to PhuQuoc. This will be in addition to the 4 other routes which the airline offers into the country. These flights operate to Ho Chi Minh, Da Nang, Hanoi and NhaTrang.
There is also Bamboo Airways, the startup airline which is set to become Vietnam’s 5th carrier, proof that the airline companies believe there is still room for competition in the Vietnam aviation industry.

Vietnam aviation to get its sixth carrier

Malaysia-based AirAsia and Vietnamese firm Aviation to launch a new low-cost airline. A memorandum of understanding to this effect was signed by AirAsia Group CEO Tony Fernandes and Vietnamese businessman Tran TrongKien, CEO of Hai Au Aviation.
Two companies will invest in construction, infrastructure and development of human resources to establish a low-cost airline. The new airline is expected to adopt Air Asia's business model.