The Ministry of Transportation (MOT) has just completed the draft adjustment of aviation transport development plan up to 2020 with orientation to 2030 to submit to the Prime Minister. Relevant ministries are being consulted. This could be a new opportunity for investors to invest in the aviation sector.
As forecast by the Ministry of Transportation, the total passenger transport market of Vietnam’s airlines will experience an annual average increase of 16% by 2020 and 8% in the period 2020-2030. The transport volume is estimated at 64 million passengers per year by 2020 and 131 million passengers by 2030. According to the MOT, the number of aircrafts of the Vietnam’s airlines should reach more than 220 by 2020, and in 2030 the number will be 400, up 70-100 ones compared to the previous plan.
Currently, there are 7 businesses licensed to fly, but only 4 of which are involved in the market. The total number of Vietnam’s own airplanes as of 2017 is 189. The rate of Vietnamese people traveling by air is still the lowest compared to other countries in the region and in the world, however, Vietnam's aviation market is in the state of over-demand.
To meet the needs of people traveling by air, Vietnam needs more airlines instead of 4. The leaders of the firms have also shared that Vietnam needs about 10 airlines to enhance the competitiveness of the market. However, the investment in the air transport is facing difficulties both planning and licensing procedures.
Aviation is a conditional business, requiring investors to capitalize on the market and compete fiercely. In Vietnam, it takes 3-4 years for an aviation business to be established. This stage only satisfies the requirements for business registration procedures at the Departments of Planning and Investment (DPI). Compared with the previous period, the procedures for applying for aviation business license have two new points: It must be in line with the industry planning and must be appraised in parallel by two advisory agencies - the Ministry of Transport and the Ministry of Planning and Investment (formerly Ministry of Transport only). Therefore, many investors who already have their businesses established have not been licensed to participate in the market.