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Vietnam aviation industry to see US$1 billion revenue shaved on Covid-19
Ngoc Thuy 19:05, 2020/02/27
Northeast Asian markets such as China, Japan, Taiwan and South Korea make up a significant source of revenue for Vietnamese airlines.

The Civil Aviation Authority of Vietnam (CAAV) has estimated the Covid-19 epidemic would cause a decline of 15% year-on-year in the number of air passengers and a loss of VND25 trillion (US$1.08 billion) in revenue to local airlines, VnExpress reported.

 

At a meeting on February 27, CAAV Director Dinh Viet Thang said the agency has envisioned two scenarios for Vietnam’s aviation market in 2020 under the impact of the Covid-19 epidemic.

In the first scenario where the epidemic is contained before April, airlines in Vietnam would handle a total of 67 million passengers, down 15% year-on-year, including 32 million foreign and 35 million domestic passengers.

However, if the epidemic could only be controlled in June, air passengers are predicted to fall 22% year-on-year to a total of 61 million, including 10 million foreign passengers.

Flag carrier Vietnam Airlines expected the number of passengers to decline 2.5 million this year, leading to a decrease of VND12 trillion (US$519 million) in revenue.

In addition to a plunge in the number of Chinese passengers, Vietnam Airlines is facing a decline in the number of passengers in other international and domestic routes.

Other airlines Vietjet Air and Jestar Pacific are seeing the same dim perspective.

Thang said Northeast Asian markets such as China, Japan, Taiwan and South Korea make up a significant source of revenue for Vietnamese airlines.

Since the outbreak of the disease, local airlines have suspended all flight routes to China, meaning a loss of around eight million passengers for 2020.

Meanwhile, the number of two-way flights to South Korea has been down 41% compared to last year, standing at 141 round trips per week against 191 in 2019.

Notably, the number of passengers between Vietnam and South Korea plunged over 50% from an average of 26,000 daily to around 8,000  - 12,000.

For flight routes to/from Taiwan (China), the flight frequency declined 25% to 172 from the previous 231 per week, of which Vietnamese airlines cut 34% of their flights to Taiwan.

Regarding the Japanese market, flight operation is not affected at the moment, but airlines are considering reducing flights.

Amid the dire situation for local airlines, the CAAV are proposing financial support to help them partially offset the losses.

At the meeting, Minister of Transport Nguyen Van The agreed with these initiatives and said airlines could open new flight routes to India and other domestic destinations.

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