Passengers checking in at Noi Bai Airport (Hanoi). Photo: Phan Cong
According to the forecast by the International Air Transport Association (IATA), the global aviation market will fully recover by the end of 2024. In which, the Asia-Pacific market, the slowest recovering region, may break even and achieve a profit of about $1.1 billion in 2024. IATA also predicts that global airlines will achieve record revenue of $964 billion, with passenger transportation revenue accounting for about $717 billion, an increase of 12% compared to 2023.
Domestic market fully recovers
According to the Civil Aviation Authority of Vietnam, after being heavily affected by the COVID-19 pandemic and the resulting consequences, the domestic market has fully recovered in 2023 and has grown compared to the pre-COVID-19 period. The international market is also showing signs of recovery and returning.
The aviation market in Vietnam is also in line with the trend of the Asia-Pacific region and will fully recover by the end of 2024.
The forecasted total demand for air passenger transportation in 2024 is about 84.2 million passengers, an increase of 15% compared to 2023 and 6% compared to 2019. Among them, domestic passenger transportation reaches about 41.5 million passengers, an increase of 3.3% compared to 2023 and 11% compared to 2019; international passenger transportation reaches about 42.7 million passengers, an increase of 15.8% compared to 2023 and 6.4% compared to 2019.
The total demand for cargo transportation reaches 1.16 million tons, an increase of 8.5% compared to 2023 and 92.2% compared to 2019. Among them, domestic cargo transportation reaches 210 thousand tons, an increase of 20% compared to 2023 and 81.8% compared to 2019; international cargo transportation reaches 950 thousand tons, an increase of 6.1% compared to 2023 and 95% compared to 2019.
The demand for transportation by Vietnamese airlines is estimated at about 61 million passengers, an increase of 9.3% compared to 2023 and 10.9% compared to 2019. Among them, domestic passenger transportation reaches about 41.5 million passengers, an increase of 3.3% compared to 2023 and 11% compared to 2019; international passenger transportation reaches 19.5 million passengers, an increase of 24.6% compared to 2023 and 10.6% compared to 2019.
The market is expected to receive favorable conditions and positive signals from the tourism development policies of domestic and international localities, creating conditions to improve the capacity to exploit domestic and international routes. In addition, the research and opening of new routes by Vietnamese and foreign airlines are also opportunities to develop the market.
Potential risks
However, in addition to the awaited advantages and opportunities, there are still challenges, existing risks, which may increase and potential risks that may arise in 2024 that the aviation industry must face, which may directly affect the recovery and development according to the forecast scenario.
Challenges and risks may include: Uncertainty and negative factors affecting economic growth and development in domestic and international markets (such as the risk of inflation and continued exchange rate increases, many countries maintaining tight monetary policies, actual interest rates not decreasing…); adverse developments in aviation fuel prices; ongoing military conflicts in some countries and regions, with no signs of abating or ending; the risk of a shortage of high-quality human resources in the aviation industry; the situation of recall and maintenance of aircraft engines by Pratt&Whitney directly affecting the operational capacity of airlines…
In addition, fluctuations in air travel demand by passengers and incomplete capacity of aviation infrastructure to respond are also challenges for the development of the aviation industry in the recovery process in 2024.
Support recommendations for airlines
In 2024, the Civil Aviation Authority of Vietnam continues to study, evaluate, closely monitor the situation, forecast market demand, coordinate with airlines and units in the industry to have timely and appropriate solutions in line with the serving capacity and operational conditions of aviation infrastructure, supplement supply load on high-demand routes, key routes in specific stages.
In addition, the implementation of solutions to support the operation of Vietnamese airlines: Recommend the Government to reduce some types of taxes and fees until the end of 2024, support interest rates for enterprises in the aviation industry; encourage and create conditions for Vietnamese airlines in ensuring transportation capacity and increasing operational capacity; work with Aviation Authorities of countries to increase supply loads, support operational activities at airports that Vietnamese airlines fly to; support airlines in increasing transportation capacity, supplementing aircraft fleet to meet market demand, contribute to accelerating recovery and development; encourage airlines to operate international flights to international airports other than Noi Bai and Tan Son Nhat, such as Da Nang, Cam Ranh, Hue, Phu Quoc, Van Don, Cat Bi, and even domestic airports that can operate international flights such as Lien Khuong (Da Lat), Phu Cat (Binh Dinh).
The Civil Aviation Authority continues to direct Vietnamese airlines to strengthen coordination with tourism businesses, localities to implement tourism stimulus programs, offer all-inclusive air-travel packages, and increase charter flights from new markets in South Korea, China, Japan… to tourist destinations in Vietnam according to the demand of tourists…
Some key indicators set out by the Civil Aviation Authority for 2024 are: the total aviation market in 2024 reaches approximately 80.3 million passengers and 1.16 million tons of cargo, an increase of 7.1% and 4.8% respectively compared to 2023. Compared to 2019, there is an increase of 1.5% in passengers and a decrease of 7.7% in cargo.
Among them: domestic transportation reaches 38.5 million passengers, a decrease of 10.5% compared to 2023 and an increase of 2.9% compared to 2019; 210 thousand tons of cargo transportation, an increase of 10.5% compared to 2023 and a decrease of 18.3% compared to 2019. International transportation reaches 41.8 million passengers, an increase of 30.6% compared to 2023 and equivalent to 2019; 950 thousand tons of cargo transportation, an increase of 3.6% compared to 2023 and 5% compared to 2019.
Vietnamese airlines transport an estimated 58 million passengers, equivalent to 2023 and an increase of 5.5% compared to 2019. Among them, international passenger transportation reaches 19.5 million passengers, an increase of 30% compared to 2023 and 10.8% compared to 2019; domestic passenger transportation 38.5 million, a decrease of 10.5% compared to 2023 and an increase of 2.9% compared to 2019…
Overcoming difficulties for Vietnam Airlines
Prime Minister Pham Minh Chinh has assigned the State Capital Management Committee to submit an overall plan to overcome difficulties for Vietnam Airlines (HVN) caused by the impact of COVID-19 in the period 2021-2026 in February 2024.
Prior to that, Vietnam Airlines had submitted comprehensive restructuring plans at all levels. The carrier will conduct comprehensive restructuring, including assets, capital, divestment of member units, labor organization for streamlining personnel and restructuring concerning land and land use plans, corporate governance and digital transformation…
