Vietnamese airlines struggle with slot retention at international airports
According to the CAA, the aviation market's resurgence with China is noticeably slow, causing distress for Vietnamese carriers.
The Civil Aviation Authority of Việt Nam (CAA) has sent a report to the Ministry of Transport, drawing attention to the challenges Vietnamese airlines are encountering in retaining their allocated slots at several international airports, specifically those in China, India, and the UK.
Before the pandemic, in 2019, travel between Việt Nam and China was a thriving corridor, with 14 airlines operating flights across the two nations. This comprised 11 Chinese carriers running 32 routes and three Vietnamese operators managing an expansive network of 72 routes.
However, the COVID-19 pandemic forced airlines to halt passenger transport operations, with only a small number of cargo flights persisting.
In a new turn of events, the Civil Aviation Administration of China, in early March 2023, unveiled its slot policies. These dictate that to secure their slot allocation for the 2023 summer scheduling season, international airlines must adhere to the 80-20 slot rule. This stipulation demands airlines operate at least 80 per cent of every planned slot sequence, rooted in the principle of reciprocity.
As the 2023 summer approaches, Vietnam Airlines is set to run five routine routes from Hà Nội and HCM City to Beijing, Shang Hai, and Guang Zhou. This equates to 19 flights weekly, coupled with additional routes from Cam Ranh, Phú Quốc, and Đà Nẵng to 14 destinations in China, ensuring a frequency of 25 flights every week.
VietJet operated routes from Hà Nội, HCM City, Cam Ranh and Huế to 26 places in China with 59 flights per week.
Seven Chinese airlines operated 10 routes from nine cities of China to Hà Nội and HCM City with a frequency of 93 flights per week.
In the aftermath of the pandemic, market recovery has been sluggish, with Vietnamese carriers operating only 25 per cent of their pre-pandemic slots and Chinese airlines utilising a meagre 38 per cent. This reality raises significant concerns for Vietnam Airlines, who anticipate that the inability to maintain the slot usage rate at Chinese airports during the summer of 2023 could jeopardise their slots for the following summer.
According to the CAA, the aviation market's resurgence with China is noticeably slow, causing distress for Vietnamese carriers. They fear they may not be able to meet the slot usage ratio rule, potentially impacting their slot history for the 2024 summer scheduling season.
In response, the CAA has made an appeal to the Ministry of Transport. The authority proposes preserving the slot history on the basis of reciprocity for carriers from both Việt Nam and China for the upcoming scheduling season, even if they fall short of the slot usage ratio rule this summer.
Committed to fostering a supportive environment, the CAA asserted its readiness to offer favourable conditions to airlines seeking to expand flight routes and stimulate tourism recovery.
Turning to the flight corridor between Việt Nam and India, the CAA noted that Vietnamese carriers fully utilised their allocated 28 weekly flights from Hà Nội and HCM City to New Delhi and Mumbai, as per the memorandum of understanding between the two countries. Conversely, Indian airlines have operated only half, a mere 14 out of the possible 28 flights per week.
Recognising the need for Vietnamese carriers to increase flight frequency to India, the CAA has recommended that the Ministry of Transport engage in discussions with their Indian counterparts to address the issue.
The CAA has identified significant challenges concerning the retention of slots at London Heathrow Airport for routes to the UK. According to an agreement between the two nations, each country's carriers can operate up to 14 flights per week.
In the summer of 2019, Vietnam Airlines offered seven flights per week to the UK, while no UK airlines were operating flights to Việt Nam. Post-pandemic, Vietnam Airlines resumed flights to the UK, albeit at a reduced frequency of one or two flights per week, starting from the summer of 2022.
The UK's aviation policy stipulates that airlines must utilise at least 70 per cent of their allocated slots for the summer of 2022 to retain the same allocation for the following summer season. However, due to the repercussions of the COVID-19 pandemic, Vietnam Airlines was unable to meet the required slot usage ratio, thereby jeopardising its slot allocation for the summer of 2023.
The CAA acknowledged that their repeated attempts to help Vietnam Airlines retain its slots at London Heathrow Airport have proven fruitless. The principle of reciprocity, usually effective in such negotiations, is moot in this case since British airlines do not operate flights to Việt Nam. — VNS
