Although the number of domestic passengers increased by nearly 30% compared to the same period in the summer months of 2019, however, due to the skyrocketing gasoline price, airlines are still losing about 100 billion VND/month.
According to Director of the Civil Aviation Authority of Vietnam Dinh Viet Thang, although airlines have restored many flight routes and solved cash flow, due to the skyrocketing fuel price during the past time, revenue has not yet covered costs.
Specifically, in the first 6 months of 2022, the volume of flights at Vietnam’s airports reached 205,000 flights. In which, transit flights reached about 66,700 flights, up 28% over the same period in 2021.
Particularly in the second quarter of 2022, the volume of domestic passenger transportation continuously increased by 10-15% month by month as well as nearly 30% compared to the same period in the summer months of 2019 (the time before the COVID-19 epidemic). Passenger volume through airports reached 43.4 million passengers, up 65.5%.
Particularly, the volume of passengers transported by Vietnamese airlines reached about 21.4 million passengers, up 62.4%. In which, the volume of domestic tourists is 20.8 million, up 57.3%.
International visitors to Vietnam are not as expected
Although domestic aviation is growing very well, according to airlines, profits from this segment are not large, international aviation, which is the main profit-making business, is still struggling.
For example, South Korea, the market that accounts for a large proportion of international visitors to Vietnam, is still limited by low numbers of flights and complicated entry conditions.
The Chinese market is currently only able to increase 1 flight/week, to 2 flights/week due to China maintaining the Zero COVID-19 policy. Other markets such as Taiwan (China), Japan are in the process of gradually opening up.
“The goal set in the last 6 months of the year is to restore maximum routes to Taiwan, Japan and South Korea and increase routes to the Chinese market to about 30% compared to the time before the COVID-19 epidemic.”, Mr. Thang said.
Trinh Hong Quang, Deputy General Director of Vietnam Airlines, said that the speed of recovery of international routes is not as expected. Statistics show that the number of international visitors to Vietnam in the first 6 months of 2022 reached nearly 2.4 million. This figure is only 11% compared to the same period in 2019.
Every month, airlines still lose 100 billion dong
In addition to the difficulty of international passengers, airlines are also extremely “struggling” because of high fuel prices. Vietnam Airlines said that according to calculations, if the price of gasoline and oil increases by 1 USD, the airline will lose another 12 billion dong in fuel fees. If in 2019, the cost structure of gasoline accounted for 28-29% of the total cost of Vietnam Airlines, now, this ratio has increased to 38-40%.
“Airlines have restored many flight routes and solved cash flow, but due to the skyrocketing price of gasoline and oil during the past time, revenue has not yet covered the costs, it is estimated that firms still lose nearly 100 billion dong/month,” said Mr. Dinh Viet Thang.
At the same time, the Director of the Civil Aviation Administration of Vietnam also proposed the Ministry of Transport to consider and propose to reduce environmental taxes and gasoline to support operating costs for airlines and gradually loosen the ceiling price so that airlines can be more flexible in ticket prices in the coming time.
Previously, airlines had proposed measures to support the aviation industry in the context of high gasoline prices such as 100% reduction of environmental protection tax on jet fuel, extending the time to reduce taxes, fees with the aviation industry, raising or removing the ceiling price of air tickets, …
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Source: Vietnam Insider