CASE STUDY: DESPITE INVESTMENT, AIR TRAVEL RISKS LIKELY TO CONTINUE
Despite significant investment, Vietnamâs booming civil aviation sector remains hampered by cyber, infrastructural, and human resources problems, likely contributing towards continued travel disruption.
Vietnamâs civil aviation sector has been consistently plagued by delays and cancellations in recent months. In January and February of 2019, five domestic airlines recorded around 5,000 delayed or cancelled flights, which was 17 per cent of all flights. This was a 4.2 per cent increase from December 2018, just as the overall number of flights increased to 29,363, a 22.8 per cent rise, according to the Civil Aviation Administration of Vietnam (CAAV). Jetstar Pacific had the highest number of delayed or cancelled flights at 838, or 25.5 per cent of its flights. In the first seven months of 2018, there were around 26,578 flight delays or cancellations, amounting to 15 per cent of total flights.
Likely related to the air travel disruptions, Vietnam has one of the fastest growing aviation markets in the world and is forecast to become the fifth fastest growing market by 2035
At the same time, and likely related to the air travel disruptions, Vietnam has one of the fastest growing aviation markets in the world and is forecast to become the fifth fastest growing market by 2035, according to the International Air Transport Association (IATA). The countryâs aviation market growth rate over the past decade has been 17.4 per cent on average, significantly higher than the Asia-Pacific average of 7.9 per cent. This is due to policies and agreements in the region, including the joining of several Free Trade Agreements (FTAs), the implementation of the ASEAN Open Skies policy in 2015, an increase in low-cost carriers, and a growing domestic tourism industry. The country recorded a 12.9 per cent growth in travellers and 7.7 per cent growth in cargo volume in 2018.
Although the CAAV has given several reasons for the continued travel disruptions â including flight management, weather, and technical issues â the numbers are indicative of some overall trends in the sector.
ANALYSIS: CHALLENGES FACING THE SECTOR
Cybersecurity threats and vulnerabilities: Due to its strong dependency on IT infrastructure, the aviation sector globally is at a higher risk of suffering widespread damage from cyberattacks. The European Aviation Safety Agency in 2016 estimated that there are 1,000 cyberattacks on aviation systems per month worldwide. Vietnamese aviation has also been the target of such attacks in recent years.
In 2016, a series of hacks allegedly linked to the Chinese group 1937CN created significant travel disruption. The hackers attacked the flight information screens at the countryâs two largest airports â TÃ¢n SÆ¡n Nháº¥t International Airport (SGN), serving Ho Chi Minh City, and Ná»i BÃ i International Airport (HAN), serving Hanoi â and the Vietnam Airlines website, posting a message criticising the territorial claims of Vietnam and the Philippines in the South China Sea. They also projected an English-speaking male voice disputing Vietnamâs claims over the speaker system at HAN.
Vietnam Airlines and Vietjetâs check-in systems were also penetrated, leading to a combined total of about 90 flight cancellations at SGN and HAN, and affecting around 2,000 passengers. Another hack on the same day exposed the personal information of around 400,000 members of Vietnam Airlines frequent flyers club. Such incidents highlight the cybersecurity weaknesses, as well as the level of disruption that co-ordinated cyberattacks can have on flight operations in the country.
Vietnam may be particularly at risk of further politically motivated cyberattacks from China, due to its tepid support of the Belt and Road Initiative (BRI), Beijingâs flagship international trade and development project
Furthermore, they highlight the role of political disputes in motivating the execution of such attacks. Vietnam may be particularly at risk of further politically motivated cyberattacks from China, due to its tepid support of the Belt and Road Initiative (BRI), Beijingâs flagship international trade and development project.
Infrastructure weaknesses: Several of the countryâs 21 airports â these have a total annual capacity of 75 million passengers â including HAN, SGN, Cam Ranh International Airport (CXR), Cat Bi International Airport (HPH), Phu Quoc International Airport (PQC) and Lien Khuong International Airport (DLI), are mired by capacity issues, according to the Airports Corporation of Vietnam (ACV). Furthermore, Vietnamâs Ministry of Transportation has stated that SGN â which operates around 40 per cent of the countryâs in- and outbound flights â requires significant restoration due to multiple instances of damaged infrastructure, including cracks and deformation on Runway 07L/25R, flooding, and overcapacity. HAN is also affected by such damage, including loose and cracked material on Runway 1B, according to local media reports. In summation, capacity issues, combined with damage or ageing infrastructure, have been a major contributing factor towards flight disruptions such as long check-in queues, as well as safety issues.
Human resources problems: Industry insiders have stated that hiring qualified personnel has been an issue in the industry. Applicants often do not meet professional standards and there is a lack of local training centres. This issue is compounded by the fact that some carriers have cut training costs in order to achieve higher profits. This has led to all domestic airlines except for the flag carrier Vietnam Airlines to hire most of their staff from abroad. Furthermore, there is a shortage of qualified pilots and only two flight-training centres.
FORECAST: WHAT IS THE LIKELIHOOD THAT DELAYS AND CANCELLATIONS WILL PERSIST?
Passenger air traffic in Vietnam is predicted to total 280 million annually with a growth rate of 8 per cent a year by 2030, according to the CAAV. Furthermore, freight traffic is forecast to increase at an average annual growth rate of 18 per cent to 2.2 million tons by 2020 and is expected to reach 6.8 million tons by 2030.
The existing infrastructure means that airports are struggling to accommodate the continuing rise in demand. In order to mitigate the effects of infrastructural issuesâ¦