International collaboration - a key to recover Vietnam’s aviation and tourism
The Southeast Asia nations are expected to promote cooperation and issue support policies to increase travel demand.
Michael V. Nguyen, Country Director Boeing Vietnam, told The Hanoi Times about his expectations for aviation and tourism prospects of Vietnam and Southeast Asian countries.
|Michael V. Nguyen, Country Director Boeing Vietnam. Photo: Boeing|
Have you seen positive signs of the tourism recovery in Southeast Asian countries after the easing of international travel restrictions?
It’s encouraging to see governments in Southeast Asia announce timelines to ease pandemic restrictions, normalize life with Covid-19, and revive their economies. In this region, over 40 million people are employed in the travel and tourism industry alone and it represents almost 25% of some countries’ pre-pandemic GDP.
We’re increasingly seeing the flying public and governments have confidence in health and safety during air travel and this is helping with passenger air traffic rebound in Southeast Asia. Increased international collaboration is key to recovery.
Measures such as vaccinated travel lanes and recognition of foreign Covid-19 vaccine certifications are facilitating travel recovery. We believe that if governments can get together and provide a simplified, easy and coordinated way to transit borders based on data-driven analysis and clearly communicate policies to travelers, you will see travel increase.
Southeast Asia is one of the fastest-growing markets in the world with an aggregate aviation growth forecast of 5.5% annually outpacing China, Africa, and Latin America. This is driven by increased growth in production, GDP, and therefore increased middle-class households.
Additionally, healthy regional relationships spark economic and aviation growth through the continued ASEAN Open Sky agreement and promotion of leisure markets. Strong traffic growth will increase the aviation fleet by 4x over the next 20 years.
Aviation is a high growth market driving year over year growth annually, the fundamentals to travel including visiting friends and relatives, business traffic, and leisure travel remain strong. Because of this, the 20-year forecast for new delivery airplanes to the Southeast Asia region is in excess of 4,400 aircraft valued at over US$800 billion.
The tourism industry needs about 3-6 months to prepare for inbound tourists after a long time of border closure. Could you evaluate the Southeast Asian countries' preparation for the return of post-pandemic travel?
Southeast Asian countries including Vietnam are taking positive steps toward opening borders and resuming pre-pandemic activities.
Healthy and safe travel requires multiple layers of protection. Effective cleaning, advanced air filtration, and other safeguards can help ensure the health and safety of every person who steps onboard an airplane. Data-driven testing protocols on the ground can help reduce Covid-19 prevalence just as well as, if not better than quarantines. Governments in the region are also taking a proactive data-driven, risk-based approach to minimize disease transmission risks between countries.
We are constantly talking to our airline customers and government partners in Vietnam to provide timely guidance, and share data, information and analysis to help inform decisions on safe and efficient travel.
What will make Vietnam's tourism and aviation industries achieve the same rapid growth as before the pandemic? What would possibly be the challenges to this?
While Covid-19 caused far-reaching changes for the aviation industry, what has not changed is the expectation that global aviation growth will be increasingly driven by this region.
The pandemic brought the industry together to work side by side to build multiple layers of protection to minimize health risks for passengers and crew throughout the journey. Through a harmonized and cooperative effort, we can safeguard the travel journey for passengers, flight crews, and airport workers, maintain global connectivity and enable economic recovery.
An area that needs attention is international coordination. During Vietnam’s 2020 ASEAN presidency, Vietnam led the way in promoting standard operating procedures for future public health emergencies and recognized the need to develop a common set of pre-departure and post-arrival health and safety measures for regional travel.
Governments around the world agree with these goals. Now is the time for countries to work through international organizations to implement specific data-driven, risk-based approaches to health crisis management in the air transport sector. ICAO has already aggregated best practices and provided guidance on its Covid-19 Response and Recovery Platform, which countries should use as the foundation for these coordinated policies.
Vietnam is among Southeast Asia’s fastest-growing markets. Airport infrastructure challenges due to market pair saturation and airspace congestion could impact this growth. Over the past five years Vietnam’s population has grown by about 6%, while the growth in air passenger capacity or supply has doubled and through the end of the decade in 2030 forecasts predict passenger demand to grow by an average annual rate of 6.2% from 2019 traffic levels.
|Hanoi is the host of the opening and closing ceremonies of the SEA Games 31. Photo: Duy Khanh/ The Hanoi Times|
How will the 31st SEA Games event be held in Hanoi and many other provinces to promote this growth?
Sport is a major contributor to economic and social development. Events such as the SEA Games have the potential to advance Vietnam’s tourism sector and bring travelers back as borders reopen while keeping safety guidelines and Covid-19 protocols in mind.
What do you expect from the potential of the aviation and tourism market in Southeast Asia, especially Vietnam in 2022?
Southeast Asia’s fundamental growth drivers remain robust. With an expanding middle-class and growth in private consumption, the region’s economy has grown by nearly 70% over the last decade, which increases the propensity to travel. The region is also placed with more room for expansion because of an emerging middle class, which could be 60 million new passengers in the next 15 years.
Travel and tourism sectors as important drivers of economic growth. Boeing's Commercial Market Outlook (CMO) forecasts that rising air travel will see the airplane fleet in Southeast Asia growing five percent by 2040, resulting in the demand for more than 4,400 new airplanes valued at $700 billion.
With rapid economic growth, Southeast Asian countries such as Vietnam will also see fleet expansion and passenger traffic well above global averages. Low-cost carriers are forecast to expand intra-regional networks with single-aisle jets, while open skies and trade agreements will enable carriers to invest in fuel-efficient widebodies to serve long-haul routes.
Single-aisle jets will account for more than 80% of the deliveries, which will position the region to connect the domestic routes in Southeast Asia and key leisure routes between China and Northeast Asia. Widebody jets including passenger and cargo models will total over 800 airplanes. Tied to economic and fleet growth, demand for maintenance, repair, overhaul, and modifications account for a majority of projected commercial aviation services demand.
Thank you for your time.
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