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Vietnam to cease new airlines establishment due to Covid-19

11:04 | 14/05/2020

Vietnam will not consider applications for new airlines as the country prioritises the recovery of its aviation sector after the impact of the novel coronavirus, the Civil Aviation Authority of Vietnam (CAAV) said on Wednesday.

vietnam to cease new airlines opening due to covid 19 Vietnam Airlines opens five new domestic routes
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vietnam to cease new airlines establishment due to covid 19
Aircraft seen at Tan Son Nhat International Airport in Ho Chi Minh City. (Photo: Shutterstock)

“The government now has to focus on resuming domestic and international routes and supporting existing airlines, which have been hit hard by the outbreak,” the CAAV said in a statement.

Minister Nguyen Van The also said that the Ministry of Transport will propose to the Prime Minister in the immediate future, focusing on recovering the domestic and international air transport market, removing difficulties for Vietnamese airlines.

However, Minister Nguyen Van The said that the establishment of a new airline will be considered after the recovery of aviation market. This decision is to ensure the management of airlines in Vietnam, and the stable development of the industry.

vietnam to cease new airlines establishment due to covid 19
The establishment of a new airline will be considered after the recovery of aviation market (Photo: Vietnam Booking)

Mr. Dinh Viet Thang, Director of the Vietnam Aviation Administration, said that the air transport was recovering quite quickly after the social distancing regulations were gradually relaxed.

However, it is likely that in the middle of 2021, the domestic market will recover. With the international market, it will be recover at the end of 2021, according to Labor.

The new decision means that two airlines awaiting permits, Kite Air of hospitality group Thien Minh and Vietravel Airlines of tourism firm Vietravel, will have to continue waiting, according to VnExpress.

vietnam to cease new airlines establishment due to covid 19
Aviation is the most affected sector in the 5 transport industries (Photo: Zing)

Vietnam’s aviation market has seen double-digit annual growth over the past decade but due to the pandemic, the number of arrivals this year is expected to fall by 43% on the year, according to a transport ministry report in April.

Vietnam suspended all international and most domestic flights in March and April in an effort to curb the spread of the coronavirus, which has infected 288 people in the country.

At the May briefing of the Ministry of Transport, Mr. Tran Bao Ngoc, Director of the Department of Transport, said that aviation is the most affected sector in the 5 transport industries. Most fleets of Vietnamese airlines are parked at airports and are not put into operation.

Revenue and profit of Airport Corporation (ACV) went down about 24%. Flight control output and revenue of Vietnam Flight Management Corporation (VATM) decreased by about 60% compared to the same period in 2019. The air transport market has a total of about 43 million guests, down 46% compared to 2019, according to Labor.

Domestic flights have resumed since April 22, after the government lifted a lockdown order, while international flights are expected to partially resume from June 1.

There are five commercial airlines in operation in Vietnam: Vietnam Airlines, Jetstar Pacific, Vietjet Air, Vietnam Air Services Company (VASCO) and Bamboo Airways, reported by Reuters.

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.

The carriers have resumed domestic flights, while international flights remain banned except for special ones approved by the government.

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