Vietnam air logistics faces numerous challenges for sustainable development: insider

The air transport market in Vietnam has recovered to pre-Covid levels, matching the performance of 2019, but it still faces numerous challenges to achieve sustainable development, says Vo Huy Cuong, an expert in this field.

Strong recovery of air transport

Speaking at a forum entitled "Air Logistics Services for Developing Vietnam's Tourism Destination Brand" held in Hanoi on Thursday, Cuong, former deputy director of the Civil Aviation Authority of Vietnam (CAAV), said that in 2024, the Vietnamese aviation industry had returned to the growth levels seen in 2019, which was considered the peak of the industry before the downturn caused by the pandemic.

He cited that the total international passenger traffic is expected to exceed 41 million, a 27% increase compared to 2023, and equivalent to the 2019 level.

Regarding the market share of international transport, Vietnamese airlines maintained a stable share of over 42%, with Vietnam Airlines holding 18% and Vietjet around 24% and a seat occupancy rate of nearly 80%. It is predicted that international air cargo transport to/from Vietnam will continue to grow by over 10% year-on-year in 2025.

Explaining the reasons behind this recovery, Cuong highlighted that Vietnam had established and maintained its image as a safe destination, particularly with regard to air travel security. The Vietnamese aviation sector had also been awarded the Category 1 (CAT 1) status by the U.S. Federal Aviation Administration (FAA), which reassures foreign airlines about flying to Vietnam.

Additionally, Vietnam's visa policy has been considered more lenient compared to other countries, which has facilitated the entry of international tourists, he added. After the pandemic, the government, the Ministry of Transport, and CAAV actively communicated with international partners to restore international flight routes that were disrupted by Covid-19, helping build trust in Vietnam’s aviation industry.

According to him, Vietnam’s aviation infrastructure has also been continuously upgraded and expanded. Authorities have worked decisively to make it easier for airlines to make flight schedules and operate effectively, while also improving passenger services at airports and simplifying immigration procedures.

Cuong further emphasized the competition and efforts by both Vietnamese and foreign airlines to increase operations and open new routes. He pointed out that currently four airlines (including two main players namely Vietnam Airlines and Vietjet) are operating 98 international routes to 20 countries and territories, while 72 foreign airlines from 30 countries and regions operate 124 routes to/from Vietnam.

Nine challenges for sustainable development

According to Cuong, despite continuous upgrades to aviation infrastructure, including the major national project to build the Long Thanh International Airport in the southern province of Dong Nai, and the gradual recovery and improvement of local airlines’ competitiveness, Vietnam’s aviation sector still faces significant challenges.

Firstly, the evolving and unpredictable global geopolitical situation, particularly the risk of localized military conflicts escalating in Europe and the Middle East, continues to affect global economic recovery post Covid-19.

Secondly, economic sanctions and airspace closures continue to negatively impact intercontinental air transport (e.g., flights from Vietnam to Europe and North America). The need to reroute flights around restricted airspaces, such as those over Russia and conflict zones, significantly increases fuel and maintenance costs for flights between Vietnam and Europe or North America.

Thirdly, the breakdown of supply chains for raw materials has reduced the ability to provide new, fuel-efficient, environmentally friendly aircraft to replace older fleets, which must be retired to meet environmental protection and efficiency standards. Cuong pointed out that ordering a Boeing aircraft today may only result in delivery in 2032.

Fourthly, operational costs for flights are expected to rise due to the requirement to use the Sustainable Aviation Fuel (SAF) to reduce carbon emissions. Currently, SAF is priced at nearly twice the cost of conventional jet fuel, posing a significant challenge for both domestic and international air transport. As a result, reducing airfare is unlikely.

Fifthly, the need for enhanced aviation security is not limited to airports, but extends to all critical infrastructure within the aviation industry, including aircraft. There is a growing risk of cyberattacks and threats from unmanned aerial vehicles (UAVs) targeting civil aviation, as seen in incidents like the U.S. air traffic control system outages.

Sixthly, unpredictable weather patterns, including extreme storms and turbulence, also hinder aviation operations.

Seventhly, the risk of another large-scale disease outbreak remains, with the discovery of 323 virus vials in Australia and biological weapons laboratories in Ukraine as examples.

Eighthly, the quality and quantity of the workforce in Vietnam’s aviation sector, especially specialized personnel such as pilots, engineers, aircraft mechanics, and air traffic controllers, remain a constant challenge. It is necessary to ensure sufficient staffing for future operations at the Long Thanh International Airport.

Ninthly, the shift in global tourist demographics requires ongoing research to adapt and flexibly re-engage markets when conditions allow.

In conclusion, Cuong noted that these challenges require proactive preparations from the aviation industry, especially the airlines, to ensure sustainable development.