The birth of new airlines, along with its subsequent investments in Vietnam's aviation infrastructure, promises a significant improvement in the country's air transport capabilities and creates more options for passengers.
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Vietnam currently has four airlines, including national carrier Vietnam Airlines, budget operator Jetstar Pacific Airlines (partly owned by Vietnam Airlines), low-cost carrier Vietjet Aviation, and Vietnam Air Services (VASCO).
In the 2010 - 2017 period, Vietnam's aviation market witness an average growth rate in passenger and cargo transportation of respective 16.64% and 14% per annum, according to the IATA's estimation.
In the first six months of 2018, the industry served 24.6 million passengers, up 15.2% year-on-year, and handled 176,400 tons of goods, up 14.8% year-on-year, revealed the latest statistics.
Last year, Vietnam received a record of 12.9 million foreign visitors, up 29.1% year-on-year, while around 7.5 million Vietnamese traveled overseas and 70 million on domestic routes. The majority of passengers were in favor of air transportation.
According to the Tourism Advisory Board and the Private Economic Development Research Board, Vietnam's aviation industry with 21 airports currently and around 75 million passengers per year is lagging behind countries in ASEAN in term of the level of openness. For example, Thailand's population is equivalent to 72% of Vietnam's, but the former's number of airports and foreign tourists are four and three times higher than those of the latter, respectively.
Under this circumstance, the two boards proposed opening the skies, liberalizing air transport and boosting airport infrastructure development.
The move would help more passengers access air transport and create new markets, stated the two boards' representatives.
The International Air Transport Association estimated that between now and 2020, passenger transportation in Vietnam is expected to rise by 16%, and from 2020 to 2030, by 8%. Cargo transportation will increase by around 18% until 2020, and 12% between 2020 and 2030. The growth will make Vietnam the world's fifth fastest-growing aviation market by 2035.
Under such estimation, Vietnam would need at least 10 additional new airlines to meet growing demands. As a result, it is inevitable that new private airlines are introduced to create more traveling options for passengers.
However, experts warned that new airlines will put more pressure on Vietnam's already overloaded aviation infrastructure.
Grasping opportunities
Amid growing demands for air transportation, in recent years, private investors have been stepping up investment in aviation infrastructure.
Seen as a long-term investment, it is will bring benefits to the community and create positive spillover effects on the region.
According to the Civil Aviation Authority of Vietnam (CAAV), five international airports projects involving private investors are in the implementation stage or seeking approval, including International airports in Van Don, Phan Thiet, Cat Bi, Chu Lai and Cam Ranh International terminal.
Notably, Van Don is the first international airport wholly financed by a private investor, Sungroup, for which economist Tran Dinh Thien considered the project as a successful lesson of privatization.
Consequently, the difference between projects financed by the government and private enterprises lies in the implementation progress, Thien added.
At present, Vietnam ranks third in ASEAN in terms of population and fifth in domestic transportation. Vietnam's aviation market, thus, remains huge potential for development with growth rate of 8.2% per year, economist Ngo Tri Long told BizLIVE.
Moreover, the country is in a period known as the golden population structure, which translates in a high number of labor force. This will lead to a growing demand in transportation in general, and in air transport, in particular, Long added.
