When aviation recovers, tourism will develop

	Aviation sector plans to reopen domestic routes
	Civil aviation authority proposes plan to resume domestic flights
	Rescuing the aviation industry: Support with conditions

Dr. Bui Doan Ne

Covid-19 affects all economic sectors, so why should the aviation industry be prioritized for support, sir?

It can be affirmed that the aviation industry is an industry that absolutely needs to be supported, entitled to preferential loans with interest rates by only four enterprises including: Vietnam Airlines, VietJet Air, Vietnam Airport Corporation; Vietnam Flight Management Corporation has contributed over VND22,000 billion in taxes and fees in 2019, equivalent to being in the top 10 provinces and cities paying the largest amount to the budget in the country. Giving loans to airlines at preferential interest rates is actually the State's source of revenue.

In particular, when aviation recovers, tourism will develop. Tourism is a key industry bringing in US$35 billion in revenue, creating direct and indirect jobs for more than 5 million people in 2019. But the entire tourism industry, from travel to hotels, was paralyzed by the Covid-19 pandemic.

Currently, 70% of domestic and foreign tourists are related to aviation. The cost of flight tickets accounts for 40-50% of the tour price. Therefore, the recovery of aviation will help the tourism industry to develop.

In addition, the aviation development will maintain economic spillover to other industries, directly the aviation ecosystem such as ground services at the terminal; connecting supply chains, commodity chains and value chains; and actively contribute to the recovery and development of our country's economy after the pandemic.

The decline in revenue caused the short-term debt of airlines to reach over VND50,000 billion, while the cash flow shortage continued to escalate. However, according to many experts, the resilience of airlines after the pandemic is very strong. So what support measures do aviation businesses need to overcome these difficulties, sir?

In order to revive aviation businesses, the Vietnam Aviation Business Association has suggested that businesses in the industry need loans to nurture long-term revenue. Airlines need timely liquidity support, creating favorable conditions for aviation development, preserving capital and balancing the state budget in the future.

At the same time, the Government and the National Assembly should consider lending to other airlines with 0% interest like Vietnam Airlines' loan package, to ensure a fair business environment and help airlines solve liquidity problems.

The loan amount is based on the demand and size of the market share, the ability to contribute to the budget and the ability to meet the budget in the future.

The Aviation Association has repeatedly proposed a support package of VND25,000 billion with preferential interest rates for airlines, for the purpose of serving recurrent expenditures, purchasing materials and equipment, implementing programs and projects to maintain operate during the pandemic.

At the same time, tax and fee policies, although issued in a timely manner, need a deeper reduction policy. For example, the current 30% reduction in environmental protection tax on jet fuel is still low, compared to the damage not suffered. In addition, this policy needs to extend support because we have not previously predicted how long the pandemic will last. We forecast that Vietnam can control the pandemic well by the end of 2022, or it will recover as quickly as June 2022. Therefore, the policies have a period of time until June 2022, thus better supporting businesses.

For domestic flights, it is necessary to restart soon and allow those who have had two injections, or are soon eligible to travel, to return to normal. Of course, passengers still have to comply with the 5K message to ensure disease safety.

Recently, a number of countries around the world have applied the "Vaccine Passport" to restore international flight routes. What is your opinion on this matter?

One of the important highlights in the proposal of the Vietnam Aviation Business Association is to soon deploy vaccination on a large scale and consider using vaccine passports. Accordingly, in Vietnam, we should focus on priority places on tourist attractions, so that Vietnam has safe areas for international visitors to visit. At the same time, step by step reopening and resumption of international routes, accepting foreign tourists to enter Vietnam with vaccination certificates, especially guests from countries with large or potential passenger volumes, managed to control the pandemic such as: Europe, Australia, China, Korea, Japan.

We hope that the Government will direct ministries and agencies to soon issue such certificates and check-in and entry procedures for international visitors to Vietnam on commercial flights. This is also an opportunity for Vietnam to demonstrate to the world an open, integrated Vietnam and safe and effective disease control. In particular, this is an opportunity to dominate the tourism market, increase economic competition, for the aviation industry to improve operating cash flow through international flight revenue, and the tourism industry to have a chance to recover and develop.

Recently, the Civil Aviation Authority of Vietnam has developed a Draft Plan to restore domestic air transport operations to safely adapt to Covid-19 control, how do you evaluate this draft plan?

I think it is necessary to do research to return to regular domestic flights in the context that the proportion of people receiving 1-2 doses of vaccine is increasing. We need specific process and criteria for airlines to operate again. In particular, the resumption of passenger transportation and exploitation activities will contribute to helping aviation businesses have the opportunity to recover their businesses after being severely damaged by the pandemic.