Vietnam Airlines faces challenges to increase international slots

Vietnam Airlines, the national carrier, has encountered formidable obstacles in securing landing slots at international airports, as well as experiencing slot losses at London's Heathrow Airport. Moreover, the airline has grappled with the complexities of acquiring slots in China, where it has been granted a mere 28 international slots across four major airports.

These significant issues were recently addressed by Vietnam Airlines during its mid-year review conference, shedding light on the company's achievements in the first half of the year and outlining its objectives for the latter half of 2023.

Upon reviewing these challenges, the Civil Aviation Authority of Vietnam (CAAV) revealed that Vietnam Airlines, due to the impact of the COVID-19 pandemic, was unable to retain its historical slots for the Summer 2023 schedule at London Heathrow Airport, which had previously received seven flights per week.

Vietnam Airlines now operates three flights per week on the Hanoi-London Heathrow route and two flights per week on the Ho Chi Minh City-London Heathrow route. These slots are newly assigned, without the recognition of historical status, for the Summer 2024 season.

The CAAV has diligently communicated its concerns to the relevant authorities in the UK, appealing for support to safeguard Vietnam Airlines' historical slots at London Heathrow Airport. However, the Department of Transport and the independent coordinating body responsible for slot allocation in the UK have been so far unable to grant this request.

In relation to China, Vietnamese airlines are presently operating at approximately 25 per cent of their pre-pandemic capacity, while Chinese airlines have achieved approximately 38 per cent of their pre-pandemic volume.

Vietnam Airlines' Summer 2023 schedule encompasses five regular routes, connecting Hanoi and Ho Chi Minh City with Beijing, Shanghai, and Guangzhou, resulting in a cumulative frequency of 19 flights per week. Additionally, the airline operates regular charter flights from Cam Ranh, Phu Quoc, and Danang to 14 destinations in China, accounting for 25 flights per week.

Seven Chinese airlines operate 10 routes, originating from nine cities in China and serving Hanoi and Ho Chi Minh City. These flights amount to a combined frequency of 93 round-trip flights per week.

Turning to India, two Vietnamese carriers have effectively utilised their allocated supply capacity of 28 flights per week, with Vietnam Airlines and VietJet Air operating 14 each, while Indian airlines have utilised just 14 out of their allocated 28 flights.

There is keen interest from Vietnamese companies to increase the frequency of flights to the four major Indian cities by proposing a complete removal of restrictions on supply capacity.

The CAAV has suggested the Vietnamese Ministry of Transport adopt a 'use it or lose it' approach, enabling the retention of historical slots when Vietnamese and Chinese airlines fail to utilise their slots fully during the Summer 2023 schedule.

Additionally, formal requests have been submitted to the Civil Aviation Administration of China, seeking support in securing new slots at Chinese airports in accordance with the needs of Vietnamese airlines during the Winter 2023 schedule.

The challenge in India does not lie in obtaining slot confirmations from authorities there, but rather in the fact that Vietnamese airlines have already reached their allocated capacity as specified in the existing MoU between the two countries' aviation authorities.

The CAAV has been actively engaging through diplomatic channels to urge India to consider increasing frequencies on routes to the four major cities. The CAAV suggests that the lack of consideration from Indian authorities stems from the underutilisation of the agreed allocations by Indian airlines, which has impeded a thorough review of the proposal.

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