Aviation sector aims for sustainable development and healthy competition

Thursday, Dec 12, 2019 08:32

A Vietnam Airlines aircraft seen during a landing. Viet Nam is among a handful number of countries that have been able to maintain a perfect safety record for airlines for over two decades. — VNA Photo

Sustainable development and a level playing field for all are two important objectives for Viet Nam’s aviation sector, said policymakers and industry experts at a conference in Ha Noi on Wednesday.

The sector has maintained a 15.8 per cent per annual growth rate during the last 10 years, an impressive feat especially considering it has not suffered any incidents that resulted in lives being lost, said Deputy Minister of Transport Le Anh Tuan.

Tuan said the industry has been a key driver for economic growth and has helped expand commercial and cultural exchanges between Viet Nam and the world.

Dinh Viet Thang, head of Civil Aviation Administration of Vietnam (CAAV), said the sector’s fast-pace development has offered consumers more travel options, benefits and improved quality of service. Viet Nam is among a handful number of countries that have been able to maintain a perfect safety record for over two decades now.

Rapid growth, however, has created numerous difficulties and challenges for the industry, especially in keeping up with demand for infrastructure, said Vietnam Airlines CEO Duong Tri Thanh, who heads Viet Nam’s flag carrier and largest airline.

The CEO stressed the need for upgraded infrastructure and policies to encourage and attract investment from the private sector if the industry is to maintain its current growth speed.

Former head of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung said the Government must identify bottlenecks that have been hindering the aviation sector's faster growth.

“Overloaded and overcrowded Tan Son Nhat International Airport is the first major infrastructure bottleneck that comes to mind. Not only the airlines industry, it has hampered growth for tourism and other sectors,” said Cung.

In addition, CAAV’s boss Thang pointed out infrastructure was not the only issue that requires immediate attention from policymakers.

Thang said a major revamp to the country’s current Civil Aviation Law is needed. Short of clear and effective development policies and strategies, other airports across the country will soon experience the same issues as HCM City’s Tan Son Nhat International Airport.

There is still a large margin for growth in Viet Nam’s aviation sector. By the year 2025, CAAV anticipates the industry must meet travel demands of 150-180 million passengers. The number of airlines operating in Viet Nam has remained at five, a figure that can be considered low in comparison to neighbouring countries such as Indonesia (12), Thailand (16), Malaysia (10), the Philippines (12) and Singapore (6).

“Even if we count the three pending proposals from Vinpearl Air, Kite Air and Vietravel Airlines, we only have eight airlines,” said Thang.

Viet Nam-US direct

At the conference, speakers also discussed the possibility and formation of a Viet Nam-US direct route.

While it’s just a matter of time before a direct route between Viet Nam and the US becomes a necessity, the question is when and how such a route should be established, said Prof. Nawal Taneja, an industry expert.

Taneja said while established operators such as Vietnam Airlines possess more than enough of the technical capacity to fly direct, they must pay attention to brand-building and networking with partners in the US as well as to seek support from both governments.

He urged Vietnamese airlines to review their financial resources and analyse passenger data before thinking about setting up a Viet Nam-US direct route.

In addition, Vietnamese airlines must overcome many technical barriers to set up direct flights to the US, said CAAV’s Thang.

While the two governments have already signed an agreement to allow up to seven direct flights per week between the two countries, Vietnam Airlines is currently the only Vietnamese airlines that meet all the requirements to operate them.

“Security is a major issue. Airlines operating flights to the US must satisfy rigorous security requirements by US government agencies. Even Vietnamese airports are subject to US annual inspections to make sure they meet security standards,” Thang said.

The CAAV’s boss also advised airlines to carefully consider the financial feasibility of a direct route as competition could be expected to be fierce for the world’s largest aviation market, especially given the fact that there are already numerous connecting flights heading to the US from Viet Nam. — VNS

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