The international aviation sector is predicted to grow strongly in 2023, motivated by the recovery in the number of international tourists, according to analysts.
In its recent research, securities firm VNDIRECT held that most countries had removed restrictions on tourists, and this would boost both outbound and inbound travel demand.
It noted that international arrival throughput jumped 35 times year on year in the third quarter of 2022, recovering to 49.8 per cent of pre-pandemic levels.
In the base case scenario, the firm expected China to gradually relax travel restrictions from the second quarter of 2023. Thus, the international inflow recovery rate might reach 84 per cent in the second quarter of 2023 and 100 per cent in the fourth quarter to help the total international volume grow 195 per cent year on year in 2023.
Having high revenue exposure to international air travel, airport retailers would be the biggest beneficiaries of the recovery of international arrivals.
For airports, VNDIRECT held that the growth was crystal clear but might be dented from 2024 onwards due to capacity constraints. The recovery prospect of airlines would be overshadowed by high fuel prices, exchange rate volatility, and rising interest rates.
VNDIRECT experts also gave forecasts on the recovery of major air traffic markets of Viet Nam.
It noted that Viet Nam's major air traffic markets in Southeast Asia including Singapore, Thailand and Malaysia had all fully reopened and developed bilateral tourism with the country. It expected international visits from SEA to recover to the pre-pandemic level by the first quarter of 2023.
VNDIRECT also predicted that international arrivals from Europe would recover to the pre-pandemic level by the second quarter of 2023, and those from Russia by the third quarter of 2023.
India is considered a potential new market for Viet Nam's tourism, according to the report. Vietjet Air, Vietnam Airlines, and India's IndiGo and Spice Jet have launched new routes between the two countries. In particular, Vietjet Air has been granted the right to operate more than 20 new routes from Ha Noi, HCM City, Da Nang, and Phu Quoc to new destinations in India such as Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Gaya as well as increase the flight frequency to Delhi and Mumbai from July 2022.
VNDIRECT predicted that international visitors on these routes would reach 5 per cent of the total recorded in the whole market before the pandemic broke out by the second quarter of 2023. —VNS