Covid-19 comeback dashes airlines’ summer recovery hopes

By Anh Tu   August 27, 2020 | 08:43 pm PT
Covid-19 comeback dashes airlines’ summer recovery hopes
The lobby of Tan Son Nhat International Airport in Ho Chi Minh City is deserted on August 25, 2020. Photo by VnExpress/Anh Tu.
Vietnamese airlines’ hopes for higher summer revenues have been badly dented with travel demand plummeting amid the resurgence of Covid-19 in the country.

Between July 19 and August 18, which has traditionally been a period with strong demand as many families travel, the country’s five carriers completed over 16,400 flights, down 45.7 percent year-on-year.

The two largest airlines, flag carrier Vietnam Airlines and budget carrier Vietjet, each saw a year-on-year drop of 48 percent in the number of flights operated, while Pacific Airlines and Vietnam Air Services Company (VASCO) experienced drops of 61 percent and 46 percent, respectively.

Bamboo Airways was the only airline that saw number of flights rise 21 percent, as it only made its debut last year and the number of flights that it operated then was low.

All five airlines saw double-digit declines compared to the preceding June 19-July 18 period. They canceled a total of 490 flights between July 19 and August 18, a threefold month-on-month increase.

The dwindling figures followed in the wake of Vietnam starting to record hundreds of new Covid-19 community transmission cases since the end of July, most of them linked to tourism hotspot Da Nang.

Before that, demand had surged in June and early July when the country had been able to contain the novel coronavirus and families started to make domestic travel plans while companies booked business flights as economic activities resumed.

But the pandemic’s resurgence in the country has resulted in lower demand and ticket prices. A two-way ticket between Hanoi and Ho Chi Minh City for September was available for VND1.2 million ($52) Thursday, a third of the price in early July when demand was surging.

The CEO of Vietnam Airlines, Duong Tri Thanh, said earlier that the total market size in the last five months could fall 30 percent year-on-year due to the resurgence of Covid-19 cases.

He estimated a 30-40 percent year-on-year drop for the whole year.

In a bid to bolster revenues, the carriers are starting to sell tickets earlier than usual for the biggest national holiday next year, Tet (Lunar New Year). Tet falls next February.

To help carriers recover, the Vietnam Aviation Business Association this month called on the government to resume flights to countries that have contained the pandemic, and allow foreign tourists entry if they meet pandemic prevention requirements.

The association also proposed that carriers are allowed access to an a credit package of VND25-27 trillion ($1-1.17 billion) with preferential interest for three or four years; and air services fees are reduced or cut until the end of next year.

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