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The domestic air transport market in Vietnam continues to decline

Passenger transport output on domestic routes in October 2023 only reached about 2.7 million passengers, down 15% compared to October 2022, down 1.2% compared to September 2023.


Thị trường vận tải hàng không nội địa

Of which, international passenger transport output reached 2.6 million passengers, an increase of 69% compared to October 2022, a decrease of 0.5% compared to September 2023, and equal to 84% compared to September 2019.


Because it is in the off-peak period, domestic passenger transport reached 2.7 million passengers, down 15% compared to 10/2022, and down 1.2% compared to 9/2023. This is also the third consecutive month that domestic passenger transport output decreased compared to the previous month.


In September 2023, domestic tourist output will only reach 3.4 million visitors, up 1% compared to September 2022, and down 9% compared to August 2023.


The total commodity market in October 2023 is estimated to reach 97,000 tons, down 4.8% over the same period in 2022, up 1.5% over September 2023, of which international will reach 77,700 tons, down 9% over October 2022, an increase of 1.6% compared to September 2023; Domestic output reached 13,700 tons, up 19% compared to October 2022, up 1% compared to September 2023.


In October 2023, Vietnamese airlines transported 4 million passengers, an increase of 1.1% compared to October 2022, a decrease of 1% compared to September 2023; Of which, 2.7 million domestic visitors, down 15% compared to October 2022, down 1.2% compared to September 2023; International visitors reached 1.3 million, an increase of 72% compared to October 2022, a decrease of 0.7% compared to September 2023.


Due to excess supply, some domestic airlines are temporarily reducing their fleets. In particular, Vietravel Airlines reduced from 6 aircraft to 3 aircraft; Bamboo Airways, from operating 30 aircraft, has reduced to 17 aircraft and is likely to decrease further in the coming period.


Currently, the biggest challenge for domestic airlines in the last 3 months of 2023 is the sharp increase in fuel prices.


Specifically, the average fuel price for the last 3 months of the year is expected to be at 119.36 USD/barrel while most domestic airlines are building plans for the whole year of 2023 at 106.86 USD/barrel.


In addition to fuel prices, interest rates, exchange rates (exchange rates of local currencies and VND compared to USD) and many other input factors are all at a higher level and significantly more unfavorable for airlines. Vietnam compared to the pre-Covid period. These unfavorable factors will certainly add to the financial burden on airlines in 2023.


The second biggest challenge is maintaining operating cash flow for airlines. After 2 years of the pandemic, business activities froze, and no revenue but still had to incur costs to maintain the apparatus, airlines were almost financially exhausted. Currently, although the situation has recovered, the company is still facing pressure to repay previously incurred debts along with rising interest rates in recent times.

(Bao Dau Tu)


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