Vietnam Faces Shortage of Short-Haul Flights: Opportunities for Growth in Domestic Air Transport

Vietnam’s domestic air transport sector is grappling with a shortage of short-haul flights, a situation that limits the efficiency of its aviation network and economic potential.

According to ATR, the world’s leading short-haul aircraft manufacturer, only a small fraction of Vietnam’s fleet is dedicated to short-haul routes, which are crucial for improving connectivity across the country.

A Narrow Focus on Long-Haul Flights

Currently, a significant portion of domestic flights in Vietnam relies on larger aircraft, with 25% of flights on routes under 550 kilometers using planes that are not cost-effective or frequency-optimized for these distances. This practice leads to inefficiencies, particularly given that smaller, more efficient aircraft could significantly improve the cost-effectiveness of these short routes. As Jean-Daniel Kosowski, ATR’s Business Director, pointed out, “Vietnam operates just 2% of its total fleet as short-haul aircraft, whereas Japan’s ratio is 17%, and the global average stands at 25%.”
The problem lies in the underutilization of smaller regional airports. With 90% of domestic flight traffic concentrated at just 10 out of 22 airports in Vietnam, many local airports remain underused, hindering the country’s potential to develop a more balanced air transport network.

The Potential of Short-Haul Aviation

A recent in-depth report published by ATR and TEDI highlights the significant opportunities for short-haul air transport in Vietnam. The study identifies 149 domestic routes within a range of 555 kilometers, a distance ideal for small aircraft. Of these, 87 routes exhibit high traffic potential, yet remain underdeveloped. To serve these routes efficiently, Vietnam would need approximately 25 ATR 72-600 aircraft, a highly fuel-efficient and cost-effective solution for these distances.

Short-haul aviation offers tremendous economic and social benefits. Studies show that increasing the frequency of short-haul flights by just 10% could boost local tourism by 5%, local GDP by 6%, and foreign direct investment by 8%—a powerful argument for investing in this part of the aviation market.

Screens inside a Vietnam Airlines’ Airbus A350 aircraft, April 2019. Photo by VTC.

Vietnam’s Growing Aviation Market

Vietnam’s aviation industry is expanding rapidly. Domestic air transport growth is forecast to exceed 20% annually from 2023 to 2027, driven by a rising demand for air travel across the country. The government’s revised plan to increase the number of approved airports from 22 to 30 by 2030 further emphasizes the importance of short-haul flights in connecting communities and unlocking economic potential across Vietnam.
In this context, short-haul air transport is not just a complementary service to road transport, but a critical component in improving mobility, linking small cities, and ensuring that the benefits of economic growth are more evenly distributed across the country.

To optimize the domestic aviation network and meet the growing demand for air travel, Vietnam must prioritize the development of short-haul aviation. This will require expanding the fleet of smaller aircraft, better utilizing regional airports, and improving connectivity across the country. By doing so, Vietnam can unlock the full potential of its aviation sector, driving economic growth, boosting tourism, and fostering stronger connections within the region.

Related

Source: Vietnam Insider