Thursday, October 22 2020

VietNamNews

Vietnamese aviation industry dejected as Covid-19 returns during peak travel period

Update: August, 30/2020 - 18:47

 

A lounge at HCM City's Tân Sơn Nhất International Airport has few guests. VNS Photo Văn Châu

HCM CITY – 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 Việt Nam (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 per cent from the previous month and 45 per cent from the same period last year.

Vietnam Airlines’ schedule was nearly 40 per cent lighter at 4,300 flights.

Vietjet Air’s was down 31 per cent at 5,700.

Bamboo Airways, Pacific Airways and VASCO’s were down 17 per cent, 15 per cent and 43 per cent month-on-month.

A decrease in demand also dragged down fares, with round-trip tickets between Hà Nội and HCM City at the end of September priced at only VNĐ1.2 million (US$52), down two or three times from early July.

The general director of Vietnam Airlines, Dương Trí Thành, forecast the total number of domestic flights in the last five months of the year to be only 70 per cent of last year’s.

For the full year the number could be 30-40 per cent lower as could fares, he said.

To improve cash flow, airlines have to sell tickets for Tết (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 VNĐ25-27 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 per cent.

The association also petitioned Prime Minister Nguyễn Xuân Phúc to allow resumption of flights to countries that have controlled the Covid-19 outbreak and allowing foreign tourists to enter Việt Nam 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 $4 billion this year, it said. – VNS

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