Vietnam’s booming aviation encourages an upcoming housing pipeline
Thanks to a booming tourism sector, Vietnam‘s aviation sector is rapidly expanding with more routes and airlines, creating a new landscape for the industry besides housing supply for aviation professionals. Over thousands of positions will be available in the aviation industry for both local Vietnamese and foreigners in the next years, as demand for an aviation labor force continues to grow.
“Vietnamese aviation market has been growing by an average 8% per year and is expected to continue its growth in the upcoming 20 years’ time,” comments Egle Vaitkeviciute, CEO at BAA Training, an aviation school in HCMC.
The number of international tourists grew from 4.25 million in 2008 to 15.5 million in 2018, while domestic tourists rose from 20 million in 2009 to 80 million in 2019. In the past decade, total revenue generated from tourism climbed more than ten times from US$2.59 billion in 2008 to US$267 billion in 2018, accounting for 7.8 per cent of the country’s GDP.
Vietnam’s aviation industry generated an average revenue growth of 17.4 per cent, two times higher than the 7.9 per cent average across Asia.
Data from the Civil Aviation Authority of Vietnam shows that Vietnamese airlines transported 50 million passengers last year, five times higher than the number in 2008. By 2018, 68 foreign airlines from 25 countries and territories, along with five domestic airlines, contributed to the market in the aviation industry.
Over the past decade, the number of aircraft increased from 60 to 192. The flight network expanded about three times with 60 domestic and 130 international routes currently operating. The country forecasts an average growth of nearly 14 per cent in the next five years, reaching 150 million passengers by 2035.
Vietnam currently has five airlines but only Vietnam Airlines, Jetstar Pacific, Vietjet Air and Bamboo Airways have commercially exploited. Another, Vietstar Airline operates light aircrafts. Vietnamese conglomerate, Vingroup, is now in the middle of building a foundation for its aviation branch, Vinpearl Air.
Vietnam Airlines & Jetstar Pacific
Vietnam Airlines grossed a historic profit of US $1.20 billion in 2019. The airline carried over 22 million passengers on 142,000 flights and 350,000 tons of cargo in 2018 and is among the world’s leading airlines in on-time performance, scoring OTP at 90 per cent on average. In November, Vietnam Airlines won the ‘World’s Leading Airline – Premium Economy Class 2019’ and the ‘World’s Leading Cultural Airline 2019’ at the 2019 World Travel Awards. Vietnam Airlines holds 40% of the market of the industry.
In just seven years, Vietjet snapped up more than 45% of the local market by building a confident business model. In 2017, VietJet shares hit US $6.03 each, valuing it at US $1.8 billion, ahead of Vietnam Airlines at US $1.7 billion. In the beginning of 2019, the airline signed a MOU with Boeing to purchase 100 737 MAX planes worth US $12.7 billion. Just last month in November, the airline further purchased another 20 Airbus A321XLRs. Vietjet’s CEO was named the top 1,000 billionaires by Forbes this year with a net worth of US $2.6 billion.
Bamboo Airways commenced operations just earlier this year in January with a charter capital of US $56.52 million and a fleet of 10 aircrafts. Bamboo signed a firm deal with Boeing to purchase 30 Boeing 787-9s, two A330-200s, and 46 A321neos in the years ahead. The deal will increase the airline’s fleet to 30 aircraft by 2021. Bamboo Airways is also looking ahead to expand it routes to Europe and expects a revenue growth in 2020.