Want to be in the loop?
subscribe to
our notification
Business News
AVIATION INDUSTRY FORECAST TO FACE A HARD YEAR IN 2021
Despite a recovery in the final months of this year, the aviation industry is forecast to face further difficulties in 2021.
The recent recovery was thanks to a complete restoration of domestic routes and the continued good performance of freight transport.
As of November, the total number of flights decreased by 23 per cent compared to the same period last year but strongly recovered from a decrease of 92 per cent in April.
The most effective route was HCM City - Ha Noi with 540 flights per week, reaching an occupancy rate of about 90 per cent.
However, commenting on the prospects of the aviation industry, Mirae Asset Securities Vietnam Co (MASVN) believes 2021 will still be a difficult year for the industry as it has no room for further recovery until international flights are reopened.
MASVN explained the current low fares are helping push up the demand for air travel on domestic routes. However, airlines can’t further cut the fares as they are too low. If airlines continue to reduce fares, it will be difficult to make profits.
"In the context of a fiercely competitive domestic market, we believe that the business situation of Vietnamese airlines will hardly improve further until the international routes are reopened," MASVN experts told vietnamfinance.vn.
With only domestic routes operating, the competition in the aviation industry next year will be fiercer. All aircraft are now converging on domestic routes to improve cash flow. Meanwhile, Vietjet Air has received 11 new aircraft, bringing the total number of aircraft in operation to 88. Bamboo Airways reduced two A320s but received four small aircraft E195, bringing its fleet to 26.
In addition, the aviation industry also has to compete against other transportation means like passenger cars and trains which have also applied fare discounts from 15 per cent to 50 per cent.
MASVN experts estimated it would take about four months to vaccinate 30 per cent of the US population and it was the minimum rate required to fight the COVID-19 pandemic. For other countries less developed than the US, the time to hit 30 per cent will be longer.
"International flights are likely to reopen as soon as the pandemic is repelled and the transport of international passengers will begin to recover gradually from that time. However, we expect the recovery rate will be slow, caused by isolation rules and restricted tourism demands in the wake of difficulties due to the pandemic,” the experts said.
Source: VIR
Related News
CUSTOMS BUDGET REVENUE EXPERIENCES 3% DECLINE IN Q1
Vietnam’s import and export value reached a total of US$145.59 billion in the first quarter (Q1) of 2024, marking a year-on-year growth of 18.2%. However, the customs budget revenue saw a 3% year-on-year decline, amounting to VND71,520 billion in the quarter, thereby achieving 19.1% of the full-year target.
RAPID LAW IMPLEMENTATION MAY PROPEL MARKET FORTUNES
“Investors and developers are looking forward to the implementation of the new law, which will remove obstacles for a range of projects that are struggling due to stalled procedures and lack of legality. For them, the earlier the better,” he said.
NATION URGED TO BUILD ON ECO-IP MODEL
Industrial parks (IPs) involved in an initiative that aims to help push them into the realm of being classed as eco-parks have seen improvements across a string of indicators, according to a review event in Ho Chi Minh City last week.
YEN LU INDUSTRIAL PARK: NEW DESTINATION FOR INVESTORS
Bac Giang is a destination chosen by many domestic and foreign investors thanks to its locational advantages and its most opening and favorable investment policies. Assisted by local authorities, Capella Land Joint Stock Company has effectively invested in industrial zones, especially Yen Lu Industrial Park - a new destination for investors, to contribute to the province’s success in investment attraction.
OPTIMIZING LEGAL AND REGULATORY FRAMEWORKS FOR EFFICIENT PUBLIC INVESTMENT DISBURSEMENT
According to the Ministry of Planning and Investment, a 1% increase in public investment raises GDP by 0.058%, and each VND1 disbursed stimulates an extra VND1.61 from the non-state sector. However, plan implementation often falls short at around 80% annually, despite government efforts.
NATION URGED TO BUILD ON ECO-IP MODEL
For the 2020-2024 project, three IPs were selected for the transformation including Deep C Industrial Zones in the northern city of Haiphong, AMATA City Bien Hoa in the southern province of Dong Nai, and Hiep Phuoc IP in Ho Chi Minh City. Over the last four years, the level of compliance with the international framework on eco-IPs for all pilot complexes has increased in terms of environment, economy, and management.