Airlines will stop losing money at the end of this year, will ticket prices decrease?

The Civil Aviation Authority of Vietnam (Ministry of Transport) cited the forecast of the International Air Transport Association (IATA) showing that the global aviation market will fully recover by the end of 2024.

Of these, the Asia-Pacific market, the slowest to recover, could break the loss streak and achieve a profit of about 1.1 billion USD in 2024. IATA also forecasts that global airlines will achieve record revenue of 964 billion USD; of which, revenue from passenger transport will be about 717 billion USD, up 12% compared to 2023.

In Vietnam, in 2023, the domestic market has fully recovered and grown compared to the time before the Covid-19 pandemic, the international market is on the path of recovery and growth.

Therefore, the Civil Aviation Authority of Vietnam believes that by the end of this year, the Vietnamese aviation market will fully recover.

Vietnam's aviation market is expected to fully recover this year (Photo: Hoang Ha)

It is forecasted that the total demand for air passenger transport in 2024 is estimated at about 84.2 million passengers, an increase of 15% compared to 2023 and an increase of 6% compared to 2019. Of which, domestic passenger transport will reach about 41.5 million passengers, an increase of 3.3% compared to 2023 and an increase of 11% compared to 2019; international passenger transport will reach about 42.7 million passengers, an increase of 15.8% compared to 2023 and an increase of 6.4% compared to 2019.

However, the total demand for freight transport reached 1.16 million tons, although it increased by 8.5% compared to 2023, it has not fully recovered, only 92.2% compared to 2019.

This year, Vietnamese airlines are expected to transport about 61 million passengers, up 9.3% compared to 2023 and up 10.9% compared to 2019.

Of which, domestic passenger transport will reach about 41.5 million passengers, an increase of 3.3% compared to 2023 and an increase of 11% compared to 2019; international passenger transport will reach 19.5 million passengers, an increase of 24.6% compared to 2023 and an increase of 10.6% compared to 2019.

The optimistic outlook for Vietnam's aviation industry in 2024 is given in the context of the market receiving favorable conditions and positive signals from tourism development policies, creating conditions to improve the ability to exploit domestic and international routes. The fact that airlines are researching and opening more routes is also an opportunity to develop the market.

However, the agency also warned that challenges and risks still exist and may increase, and potential dangers may arise in 2024, which may directly impact and threaten the recovery and development of the aviation industry.

These are negative factors affecting economic growth (risk of inflation and exchange rates continuing to increase, tight monetary policy, interest rates not decreasing in reality...); unfavorable developments in jet fuel prices; military conflicts in some countries and regions showing no signs of cooling down or ending; the situation of recalling and maintaining aircraft engines by the manufacturer Pratt & Whitney affecting airlines...

Therefore, the Civil Aviation Authority of Vietnam said that in order to support the operations of domestic airlines, the authorities will propose that the Government reduce some taxes and fees until the end of 2024, and provide interest rate support policies for businesses in the aviation industry; encourage and facilitate airlines to ensure transport forces and increase operating capacity, increase supply capacity; support airlines to supplement their fleets, etc.

Authorities also directed Vietnamese airlines to strengthen coordination with travel businesses and localities to implement tourism stimulus programs, offer aviation-tourism combo packages, and increase charter flights from new markets in Korea, China, Japan, etc. to tourist destinations in Vietnam.

In addition, investment in construction, implementation of industry planning; upgrading of aviation infrastructure, especially Noi Bai, Tan Son Nhat and Long Thanh ports; improving operational and exploitation capacity at ports,... are also focused on.

In 2023, according to the Civil Aviation Authority of Vietnam, the total air transport market is estimated to reach approximately 74 million passengers, an increase of 34.5% compared to 2022, equal to 93.6% compared to 2019 (before the Covid-19 pandemic); of which, international passenger transport reached 32 million passengers, an increase of 1.7 times compared to 2022, equal to 77% of 2019.

Source