Tourism helps more airlines take off in Vietnam

Vietnam’s booming tourism industry has led to growth in the aviation sector, with more routes and airlines creating a new landscape for the industry.

According to data from the Vietnam National Administration of Tourism (VNAT), the number of international tourists visiting the country grew from 4.25 million in 2008 to 15.5 million in 2018, while the number of domestic tourists rose from 20 million in 2009 to 80 million this year. In the last ten years, total revenue from tourism has climbed more than ten times from VND60 trillion (US$2.59 billion) in 2008 to VND620 trillion in 2018, accounting for 7.8 percent of the country’s GDP.

Vietnam ‘s aviation market had developed strongly during that time, with average revenue growth of 17.4 percent, two times higher than the 7.9 percent average in Asia, according to the International Air Transport Association (IATA).

Data from the Civil Aviation Authority of Vietnam shows that Vietnamese airlines transported 50 million passengers last year, five times higher than in 2008. By December 2018, Vietnam’s aviation market had 68 foreign airlines from 25 countries and territories, along with five domestic airlines.

Over the past decade, the number of aircraft has from 60 aircraft to 192 aircraft. The flight network has been expanded about three times with 60 domestic and 130 international routes currently operating. Together with major airports Tan Son Nhat, Noi Bai and Da Nang, other airports such as Van Don, Cat Bi, Can Tho, Lien Khuong and Phu Quoc have contributed to the development.

In the latest report, IATA also ranked Vietnam the fifth fastest growing aviation market in the world and the fastest in Southeast Asia, and forecast average growth of nearly 14 per cent in the next five years, reaching 150 million passengers by 2035.

Potential is still huge

Given the geographical area and a population of 100 million, there is still room for the local aviation to grow. Currently, Vietnam has five airlines but only Vietnam Airlines, Jetstar Pacific, Vietjet Air and newcomer Bamboo Airways have been commercially exploited.

Vietstar Airline only operates light aircraft.

Compared to the current 13 regular airlines and nearly 10 charter companies operating in Thailand, there is still a lot of room to grow. The number of airlines operating in Vietnam is much smaller than Singapore, Malaysia, the Philippines, Cambodia and Myanmar, and five times less than Indonesia.

In a letter to the Prime Minister in mid-2018, TAB said that despite having only 72 percent of Vietnam’s population, Thailand had four times more airlines and three times more international tourists. According to the Vietnam Tourism Advisory Board (TAB), together with low tour prices, the variety of aviation services was a pull for Thailand.

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