Vietnam’s airline industry to reach third fastest-growth rate in world, IATA chief says

The airline industry in Vietnam may reach the third fastest growth rate in the world by 2014, Giovanni Bisignani, the director general and CEO of the International Air Transport Association (IATA) forecasted, adding that the country should boost investment and development.

In his HCM City visit on January 14, the IATA chief told VnExpress.net that Vietnam’s airline sector future would be very satisfactory. By 2014, Vietnam is expected to become the third fastest-growth international carrier in world, after China and Brazil, and the second quick-growing domestic airline market after China.

According to his point of view, the forecast was made based on world’s current average airline growth of 5 percent, that of Vietnam by 2014 may reach 10 percent. In addition, the country’s average GDP is expected to rise about 7 percent through 2015, which will support the industry to develop strongly.

“We can see immediately Vietnam’s monthly growth rate that it has one more plane similar to a company”, the IATA director analysed. “However, Vietnam should not be self-satisfied”.

By region, Asia-Pacific is one of places with the best airline performance. He predicted, till 2014, the whole world has additional 800 million passengers a year, out of which Asia-Pacific accounts for a half.

“That is only a prediction for future and it is not an absolute truth. Vietnam’s airline industry must be built and boosted by actual policies, indicating that it is an active industrial sector requiring innovation and creativeness”, he warned.

To catch up with the growth momentum of market, Vietnam needs to invest in upgrading technology, specification, infrastructure, management so as to minimise costs.

IATA chief said, upgrading capacity is very significant to maintain competitive advantages such as simplifying by abolishing unnecessary procedures in transport supply line. “From Check in, electronic air ticket, to bar code, ticket buyers will only provide their bar codes to authorities via mobile phones to get clearance”, he detailed.

In fact, simplifying procedures and arrangements helped IATA save $4.9 billion. At the end of 2009, the world airline industry finished the use of two-way encoded passenger cards. Currently, Tan Son Nhat airport was ready to provide those services while Noi Bai airport may realise them this spring or summer.

One of matters Vietnam’s airline industry needs to focus is that the world’s aviation recovery at this time stands still after a flourishing year in 2010, he noted.

Particularly, in 2008 when the economic crisis broke out, the aviation market saw a huge loss of $16 billion and a bigger loss of $10 billion in 2009. However, one year later, it recovered quickly to reach an impressive profit of $15.1 billion as big economies namely China and India jointly acted.

As forecasted by IATA, the global aviation market will see a profit of $9 billion, lower than the previous estimate of $11 billion. The association said the market would face more difficulties because oil is expected to climb to $84 billion a barrel in 2011, pushing fuel costs up 27 percent.

Also, global GDP growth rate, which was posted at 3.5 percent in 2010, is expected at 2.65 percent this year. Tax increases in some economies have reinforced IATA’s prediction on 2011 situation and development.

“Vietnam has to continue investing and developing. If not, the country will fall in another crisis like airline firms in Europe currently”, Giovanni Bisignani remarked.

The 230-member IATA now accounts for 93 percent of the world’s international traffic routines. European carriers with an expected profit of $300 million for 2011 (down $100 million year-on-year) will go backwards compared to major regions amid the debt crisis on high dangers, slow growth and governments’ inefficient measures. – Vietbiz24

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