Aviation to soar over next three years

By 2014, Viet Nam will become the world’s third fastest-growing market for international passengers and freight, and the second-fastest in the number of domestic passengers, according to the director general and CEO of the International Air Transport Association (IATA).

Speaking at a press conference last Friday in HCM City, Giovanni Bisignani said that Asia-Pacific airlines played an important role, contributing nearly half of global profits with a US$7.7 billion return last year.

Viet Nam remained an important market in the dynamic Asia-Pacific region, he said.

In 2009, many international airlines suffered major losses due to the economic crisis, but Vietnam Airlines managed an $8.3 million pre-tax profit.

“The future for Vietnamese aviation is bright with the GDP forecast to grow 7.1 per cent annually to 2015. However, Vietnamese aviation must be supported by sound policies that take into account that this is a dynamic industry where change is the only constant,” he said.

During his visit, Bisignani had working sessions with Viet Nam Airlines, the Southern Airport Corporation and Viet Nam Air Traffic Management (VATM).

The IATA has identified three areas of focus for the Vietnamese aviation industry, including standard global technology for air traffic management, more cost-efficient airports and air navigation services, and greater efficiency via the IATA’s Simplifying the Business programme.

Viet Nam had a world-class air navigation service provider, he said, adding that Viet Nam Air Navigation Services Corporation (VANSCORP) was awarded an IATA Eagle Award for most improved Air Navigation Service Provider in 2009.

While VATM has taken over from VANSCORP, there is still a lot of work to be done to prepare the region for the expected air traffic expansion.

VATM would have to implement and give priority to satellite-based navigation systems (ADS-B) and Performance Based Navigation (PBN), Bisignani said.

This was in line with global standards set in the International Civil Aviation Organisation’s (ICAO) roadmap for air traffic management, he added.

ADS-B allows aircraft to fly more efficiently using satellite-based navigation systems, while PBN uses the equipment on board the aircraft to improve landings.

The three-year discount scheme was implemented in April last year to provide relief to airlines at Viet Nam’s major airports.

It was a clear signal that the Government recognised the important role aviation plays, and would support the aviation growth in Viet Nam, Bisignani said.

However, the Government needed to make additional efforts to reduce the cost burden on current users of Viet Nam’s airports and airspace.

“As Viet Nam’s airports expand to meet growing demand for air travel, it is important to have cost-efficient infrastructure following ICAO’s principles of consultation with users, transparency, cost recovery and non-discrimination in order to maximise the full potential that aviation brings,” Bisignani said.

“Improving efficiency will be critical in maintaining Viet Nam’s competitiveness. IATA e-freight is one of the Simplifying the Business projects that improves services by taking paper out of the air cargo supply chain. It has generated $4.9 billion in IATA’s annual savings.”

IATA, Vietnam Airlines and freight forwarders are looking to implement e-freight in Viet Nam.

“But we need the Government to ratify the Montreal Convention 99 so that e-freight can be a reality and deliver savings for the industry,” said Bisignani.

At the end of 2010, airlines worldwide completed the implementation of the 2D bar-coded boarding pass (BCBP).

But airlines operating at Ha Noi’s Noi Bai Airport are still unable to reap the benefits from the BCBP as the cost-efficient 2D bar-code technology will only be available in the first half of this year.

This is a rare exception in a world that is over 99 per cent BCBP-capable.

“I urged the Northern Airport Corporation to make the implementation of BCBP a priority,” said Bisignani. The BCBP will save the industry up to $1.5 billion annually.

He also urged the Vietnamese aviation to pay attention to improving management and technology application.

The IATA opened a representative office in Viet Nam in 2009 aiming to help airlines, travellers, cargo carriers, State agencies and service companies as well as monitor airline safety, security and the environment.

IATA Viet Nam has established and deployed a Billing and Settlement Plan (BSP) in the country to simplify selling tickets, making reports and transferring payments between travel agencies and airlines.

Four of the top five airlines by market capitalisation are Asian airlines, such as Air China at $20 billion, Singapore Airlines at $14 billion, Cathay Pacific at $12 billion, and China Southern at $11 billion.

Next month, Bisignani will return to the region for a meeting in Singapore on the strategic promise of the Asia-Pacific vision to 2050, with the participation of 34 key leaders in international aviation.

The conference will address key issues, including building a sustainably profitable industry and efficient aircraft and infrastructure.

The results will be reported at the IATA Annual General meeting to be held in Cairo in June this year.

The rising importance of the region is also reflected in the ASEAN Single Aviation Market (ASAM), which will be established by 2015. It aims to unite passenger and cargo air services in the ASEAN region.

Rapidly developing markets are shifting the industry’s center of gravity to the East.

By 2014, the IATA expects to see 3.2 billion travellers. That is 800 million more than the 2.4 billion that will fly today. Of that 800 million, 360 million will travel within the Asia-Pacific region. — VNS

Tags: Vietnam aviation, Vietnam aviation industry, Vietnam aviation market