Vietnam’s Civil Aviation Authority (CAAV) announced last week that it will not consider applications for new airlines in Vietnam, as it prioritize the recovery of its aviation sector after the impact of the Covid-19 pandemic.
According to the CAAV, on the basis that the aviation industry has recovered by next year, the establishment of new carriers would resume from 2022.
At the beginning of this year, the ministry estimated Vietnam’s aviation industry would serve 80 million passengers this year, but now estimates a 46% drop in passenger numbers to 42.7 million passengers this year. This number doubles the worst-case-scenario forecast in February, which was a 23% drop to 61.2 million passengers.
Under the new scenario, domestic carriers would carry 32.6 million passengers this year, down 40 percent from a year ago.
Le Anh Tuan, the Deputy Transportation Minister commented on the estimates and said, "Currently, the fleet of domestic carriers operate 214 aircraft. Vietnamese carriers have just resumed domestic routes following the social distancing ease on April 23, with a payload ratio of less than 50%."
The transportation ministry has reported that under their most optimistic scenario, the ministry is estimating that it will take two years to recover and reach 2019 passenger numbers. According to officials, who declined to be named, the aviation industry is forecast to reach 78 million passengers in 2022, of which domestic airlines would handle 57 million passengers.
Vietnam has five commercial airlines in operation: Bamboo Airways, Jetstar Pacific, Vietjet Air, Vietnam Air Services Company (VASCO) and Vietnam Airlines.
In its response to the Covid-19 pandemic, Vietnam banned most domestic and international flights in March and April, resulting in hundreds of millions of dollars in losses for the two largest carriers, Vietnam Airlines and Vietjet.
With the resumption of domestic flights, the various airlines have announced resumption of schedules, but on a more limited basis than earlier in the year, which reflects the reality that many people do not yet feel comfortable flying and traveling.
Flights by international airlines remain suspended, except for special flights that have been approved by the government.