ANN/VIETNAM NEWS – Vietnam’s aviation sector is poised for a strong recovery, bolstered by declining fuel prices and a surge in travel demand.
The easing of jet fuel costs has emerged as a critical factor in reducing airline operational expenses, paving the way for more competitive ticket pricing and expanded market opportunities.
According to the Vietnam International Securities Corporation (VISE), the downward trajectory of Brent crude oil and Jet-A1 fuel prices – after peaking in 2022 – has significantly alleviated financial pressures on airlines. This shift is enabling growth in both tourism and air freight, laying a solid foundation for sustained expansion.
Industry experts predict a substantial uptick in passenger and cargo volumes, particularly during the Lunar New Year in 2025. The Civil Aviation Authority of Vietnam projects the market will serve 78.3 million passengers and transport 1.21 million tonnes of cargo in 2024, representing year-on-year growth of 7.7 per cent and 13.4 per cent, respectively.
The International Air Transport Association (IATA) also forecasts a full recovery of the global aviation market by the end of 2024, further strengthening prospects for Vietnam’s aviation industry as it capitalises on growing demand and favourable economic conditions.
Vietnamese airlines are proactively gearing up, expanding their fleets and launching early ticket sales for the Lunar New Year to cater to rising demand. Night flight frequencies are also being increased, offering passengers competitive pricing and enhanced travel options.
An impactful regulatory change took effect on March 1. The Ministry of Transport’s Circular No 34/2023/TT-BGTVT, amending Circular No 17/2019, revises domestic air passenger service pricing frameworks.
This adjustment enables airlines to offset escalating fuel and exchange rate costs seen over the past decade.
Vietravel Airlines highlights that the raised price ceiling maintains high customer satisfaction while ensuring sustainable operations. A wider fare range allows airlines to balance direct and indirect costs effectively, securing long-term business viability.
Despite the favourable outlook, the sector grapples with infrastructural bottlenecks.
Major airports like Noi Bai, Danang and Tan Son Nhat operate beyond their designed capacities. Tan Son Nhat International Airport, for instance, handles 41.6 million passengers annually against its intended capacity of 28-30 million.
To tackle this, the government is expediting infrastructure upgrades. The Tan Son Nhat Terminal 3 project, a nearly VND11 trillion (USD432.2 million) investment, is set to open by April 30, 2025.
