VIETNAM AVIATION INDUSTRY 2022 – LIGHT AT THE END OF THE TUNNEL

 

2021 is the year of crisis for Vietnam Aviation industry. Under the impact of Covid-19, “top players” such as Vietnam Airlines and Vietjet have suffered from revenue shortfall and faced the risk of legal proceedings with many overdue debts. Despite the bleak 2021, Vietnam Aviation industry still has a promising recovery in a “new normal” 2022.

 

 

 

 

 

 

 

Vietnam Aviation industry under the impact of Covid-19 in 2021

Since the Covid-19 pandemic burst, the economy of Vietnam and the world has witnessed a rapid decline. The aviation industry is one of the most affected industries and has experienced the most tragic period in history. Due to the extremely complicated situation of the Covid-19 epidemic, Vietnam Government has restricted and banned international commercial flights to Vietnam since March 2020. In 2021, the number of flights operated in Vietnam decreased by 43.4% compared to the same period last year. Leading enterprises such as Vietnam Airlines and Vietjet Air also witnessed a decline of 47.5% and 53% in the number of flights operated.

 

 

International passenger transport in 2021 reached about 500,000 passengers, down 93% compared to 2020. Normally, the number of customers transported by air account for about 1% of the total number of customers transported by all means of transport. However, since the outbreak of the Covid-19 epidemic, people’s travel by air has declined, so the rate of customer transport by air has decreased to only about 0.6%. Whereas, air freight reached approximately 1.1 million tons of goods, an increase of 21.3% compared to 2020. According to the Civil Aviation Administration of Vietnam, Vietnamese and foreign airlines had to use aircraft to transport goods in the passenger cabin.

 

 

A brighter outlook for Vietnam Aviation industry in 2022

Post-Covid-19 recovery and social adaptation in 2022

The world in general and Vietnam in particular are gradually entering the new normal state. Accordingly, although the number of Covid-19 infection cases may still increase, the way people react to and treat the Covid-19 epidemic is changing from a pandemic direction to endemic disease. Now, F1 cases only need to be self-isolated at home for 7 days and F0 cases can be self-isolated and treated at home then return to normal life after being isolated and receiving enough treatment. Compared to 21 days self-isolated for F1 cases and 30 days self-isolated for F0 cases in September 2021, we can see the transition from the acute phase to adapting and living with the pandemic.

 

 

2022 – A promising recovery  future for Vietnam Aviation industry

Following the trend of adopting and living with the pandemic, international flights are gradually operating, right from the first days of the new year. According to the plan approved by the Government, starting from January 2022, international flights to markets with high safety indexes such as Beijing, Tokyo, Seoul,… will be allowed to take off again. Experts forecast that a 6 – 6.5% economic growth of Vietnam in 2022 will be the cornerstone for the growth of the aviation industry to reach 15-20%. Accordingly, if Vietnam continues to control the epidemic and open up for the economy to grow, the aviation industry will gradually recover and grow along with the world’s aviation industry.

 

The outlook for air freight is predicted to continue to grow in 2022. Specifically, the logistics container chain is still disrupted and supply is inadequate. Along with that, the inventory-filling operations of retailers around the world are rising, forcing them to choose air freight as the solution. According to the International Air Transport Association (IATA), the air freight of Vietnam will recover to 70-75% (compared to the period before the pandemic). In which, international transport will reach about 20 – 25% and gradually increase in the fourth quarter of 2022.

 

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With a bright outlook on the future, the possibility of re-opening all international flights in the second half of 2022 is very high. It is predicted that when flights to high to medium-safety destinations are piloted successfully in the first and second quarters of 2022, international flights will be gradually operated in phases in the third and fourth quarters of 2022. Vietnam’s aviation industry is getting ready, step by step, to better serve domestic customers as well as re-served the promising international customers in 2022.

 

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