Vietnam’s major air traffic markets predicted to rebound in 2023: VNDIRECT

The international aviation sector is predicted to grow strongly in 2023, motivated by the recovery in the number of international tourists, according to analysts.
Vietnam’s major air traffic markets predicted to rebound in 2023: VNDIRECT
Vietnam’s major air traffic markets predicted to rebound in 2023. (Photo: VNA)

In its recent research, securities firm VNDIRECT held that most of countries have removed the restriction for tourists, and this will boost both outbound and inbound travel demand.

It noted that international arrival throughput jumped 35 times year on year in the third quarter of 2022, recovering to 49.8% of pre-pandemic level.

In the base case scenario, the firm expected China to gradually relax the travel restriction from the second quarter of 2023. Thus, the international inflow recovery rate might reach 84% in the second quarter of 2023 and 100% in the fourth quarter to help the total international volume to grow 195% year on year in 2023.

Having high revenue exposure to international air travel, airport retailers will be the most beneficiaries of the recovery of international arrivals, according to the report.

For airport, VNDIRECT held that the growth is crystal clear but might be dented since 2024 onwards due to the capacity constraints. The recovery prospect of airlines is overshadowed by high fuel price, exchange rate volatility, and rising interest rates.

VNDIRECT experts also give forecast on the recovery of major air traffic markets of Vietnam.

It noted that Vietnam's major air traffic markets in Southeast Asia including Singapore, Thailand and Malaysia have all fully reopened and developed bilateral tourism with the country. It expects international visits from SEA to recover to the pre-pandemic level by the first quarter of 2023.

VNDIRECT also predicted that international arrivals from Europe will recover to the pre-pandemic level by the second quarter of 2023, and those from Russia by the third quarter of 2023.

India is considered a potential new market for Vietnam's tourism. Vietjet Air, Vietnam Airlines, and India's IndiGo and Spice Jet have launched new routes between the two countries. In particular, Vietjet Air has been granted the right to operate more than 20 new routes from Hanoi, Ho Chi Minh City, Da Nang, and Phu Quoc to new destinations in India such as Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Gaya as well as increase the flight frequency to Delhi and Mumbai from July 2022.

VNDIRECT predicted that international visitors on this route will reach 5% of the total recorded in the whole market before the pandemic broke by the second quarter of 2023.

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(Source: VNA)