Opportunities for Infrastructure Upgrades in Vietnam Aviation Sector

Sep 2019

The Vietnamese airline industry is welcoming several new players, putting strain on its aviation Infrastructure. The Civil Aviation Authority of Vietnam (CAAV) recently approved an air operator’s certificate (AOC) for Vietstar Airlines, increasing the number of licensed operators to seven. Bamboo Airways entered the market earlier this year. The AOC application for Vietravel airlines is under review, while Vinpearl Air, the airline subsidiary of conglomerate, Vingroup, received a business license in July 2019 and is expected to begin commercial flights in July 2020.

Pressure on available Infrastructure is particularly visible at the country’s major airports such as Tan Son Nhat International Airport, Hanoi’s Noi Bai International Airport, as well as those in the cities of Danang and Nha Trang. Terminals and runways are operating over their capacities.

This pressure creates a large demand for airport upgrades and restoration. In 2018, the Ministry of Transportation announced a USD 191 million expansion project of Tan Son Nhat Airport in Ho Chi Minh City which will upgrade Terminals T1 and 2 to a combined capacity of 30 million passengers. There is also increased private investment, illustrated by Van Don International Airport which is the first private airport build by BOT (Build-Operate-Transfer) with a total capital investment of USD 321.4 million.  

The Vietnamese government produced a master plan to operate 28 airports by 2030, comprised of 15 domestic and 13 international airports. The total passenger transport market of Vietnamese airlines is expected to grow at an average of 16% per year by 2020 and 8% between 2020-2030, which bodes well for the country’s aviation sector, if Infrastructure can keep up with growth.

(Source: Vietnam News; Vietnam Insider)

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