Vietnam
to be world’s 7th fastest-growing aviation market: IATA
Two Vietnam
Airlines aircraft are shown in a photo taken at Tan
Son Nhat
International Airport
in Ho Chi Minh City
in November 2013. Thoai Tran/Tuoi Tre
News
Vietnam’s aviation market is
forecast to be the world’s 7th fastest-growing from 2013 to 2017, with annual
growth rates of 6.9 percent and 6.6 percent expected for international
passengers and freight, respectively, according to the International Air Transport
Association (IATA).
These statistics were shared by Tony Tyler, general
director of IATA, at a workshop co-organized by the association and national
flag carrier Vietnam Airlines in Hanoi
on Wednesday.
“Vietnam
is a dynamic and rapidly growing aviation market. The successful development
of aviation will pay big dividends to the Vietnamese economy,” Tyler said in his
keynote address at the event.
“It must be treated as a strategic asset and handled
correctly,” Tyler
added.
According to Tyler,
aviation currently contributes US$6 billion to Vietnam’s GDP and supports over
230,000 jobs. Between 2008 and 2013, Vietnam’s passenger traffic grew
by 96 percent, he said.
Challenges to be addressed
However, to maintain a high growth rate, the IATA
recommended that the Vietnamese government work with the air transport sector
to improve three broad strategic areas, including infrastructure, passenger
experience, and cargo.
Infrastructure is a critical component of the air
transport sector that needs improvement, as Vietnam ranks 82nd in the
Infrastructure Index of the World Economic Forum’s Global Competitiveness
Report, he said.
Among the ten ASEAN states, Vietnam
ranks sixth, Tyler
said, adding that the country is addressing these low rankings with
significant investments, including the announcement of an aviation master
plan to have 26 airports by 2020.
Expansion programs are underway at the Hanoi
and Ho Chi Minh City airports, with the new Long Thanh
International Airport
expected to be ready in the southern province of Dong Nai
by 2020, he said.
While encouraged by the positive steps taken by Vietnam to
improve its infrastructure, the IATA urged that careful planning and industry
consultation are needed to form a well-shaped legal framework in advance of
any change to the current structure and ownership of the Southeast Asian
nation’s airports.
Vietnam has hinted
at plans to open its airports to foreign investment and management, and to
equitize the state-owned Airports Corporation of Vietnam.
“While airport privatization can provide access to the
capital needed for infrastructure programs, we have seen enough spectacular
examples of unintended negative consequences to urge caution,” Tyler said.
“To balance the market power of privatized airports, Vietnam needs
to establish an effective independent economic regulator that is in line with
well-established international norms. That should bring about fair charging
schemes aligned with International Civil Aviation Organization (ICAO)
policies,” he said.
“Lower charges will also improve the viability of
routes and allow Vietnam
to reap the benefits from enhanced connectivity and increased traffic,” he
added.
Regarding passenger experience, the IATA executive said
the implementation of the association’s Fast Travel program and the easing of
visa requirements will improve the passenger experience in Vietnam.
Therefore, the country should make it a priority to
implement the six Fast Travel initiatives covering check-in, self-tagging of
baggage, document checks, flight rebooking, self-boarding, and bag recovery.
“Passengers have told us through the IATA Global
Passenger Survey that they want to be able to do more things themselves. As Vietnam develops its airport infrastructure,
it has the opportunity to build them around the self-service expectations of
travelers,” said Tyler.
Easing of visa requirements
recommended
A review of the visa requirements to
enter Vietnam should also be implemented, he said, adding that
every tourist who decides to have a holiday in a neighboring country because
of Vietnam’s
visa process is a lost economic opportunity, so easing visa requirements can
boost tourism.
In the Henley & Partners index of visa
restrictions, Vietnam
ranks 81st, because only 47 nationalities are not required to
obtain a visa before entering the country. This ranking does not compare well
to other regional states such as Singapore
(5th), Malaysia (8th), and
Hong Kong (15th).
“Your competitors, on the other hand, rank much higher:
Singapore is fifth, with
visa-free entry for 170 nationalities; Malaysia
is in eighth place by granting visa-free access to 166 countries; and Hong Kong is 15th, with visa-free access for
156 nationalities.”
Freight services were also discussed at the Hanoi workshop. For the
development of cargo movement, which represents 25 percent of Vietnam’s
trade by value, or $29 billion, e-freight will help to improve the efficiency
of the country’s air cargo industry.
“A key step to implementing e-freight is the adoption
of the e-Air Waybill (e-AWB). While Vietnam Airlines has been able to use
e-AWB for domestic freight, it is unable to do so internationally, as Vietnam has
yet to ratify the Montreal Convention 99 (MC99),” the IATA said.
“I urge Vietnam
to ratify MC99 quickly so that greater efficiencies can be achieved in Vietnam’s air cargo sector,” Tyler added.
MC99 provides the legal framework for the use of
electronic documents of carriage, paving the way for freight forwarders and
airlines to use the e-AWB.
On January 1, 1914, the
airline industry was formed with a plane transporting a passenger on a
flight path.
To date,
the global airline industry has transported 3.3 billion passengers and 52
million tons of cargo, providing employment to 58 million people, and
shipping goods worth $6.8 billion or one-third of the goods traded
internationally by value, according to the IATA.
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