Vietnamese airlines in race to expand international network

Vietjet is displaying proactive initiatives in expanding its international routes. The low-cost carrier has recently opened 33 international and domestic routes, bringing the total number of operated routes by the end of 2023 to 125. Among these, the airline operates 80 international routes and 45 domestic routes.

Vietjet has become the first airline to connect Vietnam with the five largest cities in Australia, including Sydney, Melbourne, Perth, Adelaide and Brisbane.

Additionally, the airline operates the most routes between Vietnam and India, covering cities such as Delhi, Mumbai, Ahmedabad, Kochi and Tiruchirappalli.

Despite the majority of Chinese citizens prioritizing domestic tourism, Australia and India have experienced the strongest growth in Vietnamese airline routes.

Last year, Vietjet also opened several routes to China, including Ho Chi Minh City - Shanghai, Hanoi - Hong Kong and Phu Quoc - Taipei (Taiwan, China).

Following the significant growth of the Indian and Australian markets last year, the Chinese market is expected to further expand this year.

Since the beginning of 2024, Vietjet has also opened new routes connecting Ho Chi Minh City with Chengdu in China and Vientiane in Laos. The airline has also announced a route connecting Melbourne with Hanoi.

According to OAG, a leading organization specializing in monitoring and statistics on tourism and aviation worldwide, Vietjet is currently the fastest-growing low-cost airline in the region in terms of operating capacity on routes under 4,630 kilometres.

The airline also boasts the best route network growth in the Asia-Pacific region by continuously expanding its network to various destinations in Vietnam and internationally.

Vietnam Airlines is also increasing frequencies on many international routes.

By the end of 2023, Vietnam Airlines had restored 90 per cent of its international route network while continuing to open new routes to India, Australia, such as the new direct route from Ho Chi Minh City to Perth.

This year, the company will continue to maintain its market share on key routes, expand international routes with plans to open a series of transcontinental routes to Canada, Italy, Northern European countries.

As for Bamboo Airways and Vietravel Airlines, these two airlines will not operate international routes but only domestic ones.

The dawn of recovery

The airlines are actively expanding international routes in anticipation of the recovery of the tourism market.

According to statistics from the General Statistics Office, throughout 2023, international arrivals to Vietnam reached 12.6 million, a 3.4 times increase compared to 2022, far exceeding the target of 8 million.

Out of a total of 12.6 million international arrivals, air travelers reached nearly 11 million, accounting for 86.9 per cent of international arrivals to Vietnam and a 3.3 times increase compared to the previous year.

Asia contributed the largest number of arrivals to Vietnam with over 9.78 million people, a 3.8 times increase from the previous year. Arrivals from Europe reached 1.459 million, a 2.9 times increase from the previous year.

However, the General Statistics Office assesses that this number is tantamount to only 70 per cent of 2019, the year before the Covid-19 pandemic.

This year, Vietnam aims to welcome 17 - 18 million international arrivals, equivalent to the pre-pandemic level. This represents a significant potential for growth for the tourism and aviation industries.

Not only did international tourists arrive in Vietnam, but the number of Vietnamese people traveling abroad also saw impressive growth in the past year.

Throughout 2023, the number of outbound Vietnamese travelers reached 5 million, doubling compared to the previous year.

The World Tourism Organization forecasts international tourism is expected to fully recover to pre-pandemic levels by 2024, with a possible growth of 2 per cent compared to 2019.

Especially, China - the world’s leading tourism market, is expected to accelerate this year due to favorable conditions for visas and improved aviation capacity. China recently also implemented visa waivers for citizens of many countries until the end of 2024.

Before the pandemic, China was the largest international tourism market, both in terms of inbound and outbound tourists to Vietnam. In 2019, Vietnam welcomed 5.8 million Chinese tourists, accounting for nearly one third of international arrivals to Vietnam.

In addition, about 4.5 million Vietnamese citizens traveled to China, topping the list of Vietnamese outbound tourists.

The growth prospects from this promising market are the reason why airlines are aggressively opening new routes to China after a period of stagnation due to the pandemic.

In reality, the international aviation market continues to lead in revenue and profits for airlines.

For Vietjet, the financial report for 2023 of this airline recorded a consolidated net revenue of VND62.5 trillion, a 56 per cent increase compared to 2022. Consolidated after-tax profit in 2023 reached VND344 billion.

Ancillary revenue and cargo transportation reached VND18.9 trillion last year, a strong growth of 46per cent compared to 2022, contributing 40 per cent to the total air transportation revenue.

A significant contribution to these revenue and profit figures is Vietjet's safe operation of 133 thousand flights, transporting 25.3 million passengers. Among them, over 7.6 million were international passengers, a 183 per cent increase compared to 2022.

For Vietnam Airlines, the total revenue and other income of the parent company for the whole year increased by 38 per cent, equivalent to over VND19.5 trillion, and consolidated revenue increased by 30 per cent, equivalent to VND21.4 trillion dong compared to 2022.

Throughout 2023, the national airline recorded a net revenue of nearly 91.5 trillion dong, a 30 per centincrease compared to the same period as the market recovered, and international revenue increased by 49.1 per cent compared to the same period last year.