Airlines strive for greater efficiency

Dinh Viet Thang, head of the Civil Aviation Authority of Vietnam (CAAV), is working with air carriers on solutions to aircraft shortfalls by reducing turnaround time, optimising aircraft operation during the day, and increasing flights after 10pm.

“We coordinate with airlines and Vietnamese diplomatic agencies abroad to support and create better conditions for them to open and increase direct flight routes, and especially resumption of international flights to destinations such as Danang, Cam Ranh, Phu Quoc, and Dalat,” Thang said.

His comments come amid a drop in the number of domestic flights and lower-than-expected recovery of international routes in the first half of this year, ringing alarm bells about flight operation efficiency among air carriers.

Vietnam Airlines is trying to pick up the pace with more international routes Photo: Le Toan

According to the CAAV, the domestic segment’s performance has been weak, with domestic tourist arrivals hitting 17 million, falling over 19 per cent on-year. “Due to the lack of aircraft, airlines had to reduce the number of flights on domestic routes. This is also a reason for the fall,” Thang added.

Dang Anh Tuan, deputy general director of Vietnam Airlines, said, “While there were more than 55,000 domestic and international flights during January-June, we still faced many challenges due to the aircraft shortfall.”

He blamed the situation on the fact that the airline halted operation of 12 Airbus A321 aircraft for technical checks, and its unit Pacific Airlines returning leased aircraft to clear debts and restructure.

Vietnam Airlines’ recovery of international routes is still lower than expected, and international flight revenues contribute 65 per cent of the airline’s total revenue. Vietnam Airlines focuses on major markets such as the US, China, and Japan.

Specifically, flights to China are recovering slowly compared to general forecasts. In the first five months of the year, the Chinese market saw a decrease of about 55 per cent compared to before the pandemic. Japanese tourists coming to Vietnam only reached 60 per cent compared to 2019, and a US route to San Francisco was opened by the airline in 2022, but it has yet to cover its costs.

Le Hong Ha, general director of Vietnam Airlines, said, “Long-haul flights are still a big challenge for airlines due to great competition. But the contribution of the US route to Vietnam Airlines is significant, bringing good results when other routes have not recovered,” Ha said

Meanwhile, Bamboo Airways has cut flight frequency on a number of unprofitable routes in recent months and is focusing on restructuring. Its fleet numbers fell by a fifth from 2022 due to restructuring and since early 2024, the airline has rented three A320 aircraft, aiming to increase its fleet to 12 by the end of the year.

Bamboo general director Luong Hoai Nam said, “The company still aims for 2024 to be the last year of business loss. From 2025, the business will break even and become profitable in the following years. Within the next three years, we will be listed on the stock exchange.”

Bamboo Airways is focusing on main routes to Hanoi, Ho Chi Minh City, and Danang, and on tourist and public service routes with high demand; as well as international routes to Southeast Asia. To ensure operating needs, Bamboo Airways needs an approximate $70 million in the last months of 2024, through capital mobilisation from credit institutions and domestic and foreign investors.

Vietjet has not been as affected by the aircraft shortfall thanks to its business strategy, and continues to open new routes. In 2024 it has opened direct flights connecting Hanoi with Sydney, bringing the total number of connecting flights between Vietnam and Australia to seven.

The airline also opened direct flights from Hanoi to Hiroshima in Japan and Ho Chi Minh City to Chengdu in China.

Aviation expert Ngo Tuan said, “Unlike Vietnam Airlines, Vietjet focuses on the niche market by opening flights to small cities and tourist destinations. This helps it gain advantages and competitive edge and better survive this difficult time. For instance, Vietjet operates the most flights to India and Australia.”

Yet to disclose its first-half results, a Vietjet representative said that the airline’s flights achieve an average seat occupancy ratio of 87 per cent, and technical reliability of 99.7 per cent. To meet operational needs, the company continuously invests in its fleet and, as of late December 2023, Vietjet boasted 105 aircraft.

Currently, air carriers are planning to rent more aircraft to serve the opening of more routes and increase flight frequency, pinning high hopes on growth.

For example, Bamboo Airways will reopen some domestic routes such as Ho Chi Minh City to Dalat, Thanh Hoa, and Phu Quoc. It will also look into to re-operating several regular international routes to destinations like Bangkok. Bamboo Airways aims to increase its fleet to 18 aircraft by the end of 2025 to operate more key domestic and international routes.

Meanwhile, Vietnam Airlines will expand operations on domestic routes such as Hanoi to both Dalat and Phu Quoc, and Ho Chi Minh City to both Thanh Hoa and Chu Lai. Pacific Airlines will focus on operating similar routes.

Several factors affecting aviation sector recovery Pacific Airlines has recorded zero passengers since the start of April after the budget airline returned its last aircraft at the end of March in an attempt to write off debts, perfectly encapsulating the ongoing struggles of businesses operating in the aviation sector.

Vietnam Airlines faces severe aircraft shortage, considers Chinese planes The CEO of Vietnam Airlines has disclosed that the airline's severe aircraft shortage is expected to persist until the end of 2024. To mitigate the impact, Vietnam Airlines is exploring the incorporation of Chinese-developed C919 aircraft into its fleet.

Vietnam Airlines to launch Hanoi-Phnom Penh direct flight Vietnam Airlines on July 13 announced a new direct flight route between Hanoi and Phnom Penh and signed cooperation agreements with Cambodian partners to boost aviation and tourism development.

Number of aircraft receiving AOC drops during January-July As of July, the total number of aircraft of Vietnamese airlines receiving air operator certificate (AOC) stood at 195, a drop of 36 compared to the same period last year, statistic from the Civil Aviation Authority of Vietnam. Of which, the number of commercial aircraft utilised by the airlines was 167, a year-on-year decline of 51.

Hong Kong Airlines boosts Da Nang tourism with new daily flight Flight HX548, operated by Hong Kong Airlines, landed at Da Nang International Airport on July 19, bringing 152 passengers from Hong Kong (China) to explore and experience tourism services in the central city.