Vietnam Airlines Counts The Cost Of Coronavirus Impact

On Thursday, Vietnam Airlines said it was losing as much as 250 billion dong (US$10.8 million) in revenue every week as a result of COVID-19 (coronavirus) flight suspensions. At the end of January, Vietnam’s Civil Aviation Authority banned all flights to and from China.

Vietnam Airlines has had to reduce its operations due to COVID-19 flight suspensions. Photo:Vietnam Airlines

Flight suspensions, reductions in operations

While the Civil Aviation Authority of Vietnam confirms that carriers are still able to operate flights to Taiwan, flights to mainland China, Hong Kong, and Macau are out of the question. According to Reuters, 70,000 visitors per month travel between Vietnam and China. Chinese tourists accounted for roughly a third of the 18 million foreign tourists visiting Vietnam in 2019.

“The epidemic has significantly reduced the travel demand of domestic and international tourists in the Vietnam network,” -Vietnam Airlines via Reuters

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In fact, it’s not just international traffic between the two countries that is suffering. The airline reports a 20-30% drop in passengers on domestic routes in the last two weeks.

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Of course, Vietnam Airlines is not the only carrier in the country. Airlines like Bamboo Airways and VietJet also fly to China. On Wednesday, the Vietnamese government said the virus has already cost Vietnamese airlines about 10 trillion dong in lost revenues, the equivalent of US$429.5 million.

China is Vietnam’s largest source of foreign tourists as well as its largest trading partner.

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Aircraft up for lease

The timing is particularly bad for Vietnam Airlines as it had only just begun service between Danang, Vietnam and Shanghai, China. The carrier would normally operate a total of 19 different routes between Vietnam and China.

With the cancelations, there is now a portion of the airline’s fleet not currently flying and generating revenue. As such, Vietnam Airlines recently announced that it would be putting some of its aircraft up for lease. At the moment the airline says it will be leasing either its Airbus A321s, its Airbus A350-900s and/or its Boeing 787-9/10s.

Vietnam Airlines A350
Vietnam Airlines is the flag carrier for the country of Vietnam. Photo: Airbus

Global and regional impacts

With airlines all over the world flying to China, this outbreak has had a global impact on aviation. However, impacts are more significant regionally.

At Singapore’s Changi Airport arrivals are down significantly due to COVID-19. In fact, the Singapore Tourism Board (STB) estimates passenger arrivals are now down 18,000 to 20,000 per day and set to decline further.

Hong Kong Airport
Air travel to and from China has been severely restricted as a result of the coronavirus outbreak. Photo: Getty Images

Between the period of 23 and 28 January, 92% of scheduled flights in and out of Wuhan were canceled. In total, out of 2,606 scheduled flights to and from Wuhan, 2,406 did not fly as originally scheduled. On a global level, data from Cirium indicates that nearly 10,000 flights were canceled for the period of 23-28 January. This not only includes flights to and from mainland China but also flights operating within China.

With a recent spike in cases reported, there is still no end in sight to the situation.

We reached out to Vietnam Airlines for an official statement. However, at the time of publishing this article, no response has been received.

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Martin

What a shame for a growing quality airline. Flew to Europe with them via Ho Chi Minh City last year and their planes were first rate (787’s and A350’s) with very personable service. I can understand the fear over this COVID-19 virus but is it rational when more people are dying every day from the standard flue?

Juan Pablo Thomson

You are absolutely right. This is a serious desease, of course, but more people die each year of the flu and/or related deseases, and nobody bats an eye. There is a lot of media hype and, through social media, a lot of demand on local governments to “do something”, and “something” is many times ill-advised or non-consequential in the spread of the desease. I saw on the news The spreading of chemicals on playgrounds (good, kids play and touch with their hands) and on parking lots (really stupid, car tires cannot transmit the virus). But like with most media-induced hypes,… Read more »

Jordan

“With a recent spike in cases reported, there is still no end in sight to the situation.”

NO, they changed how they reported suspected cases. If you have a cold or possible influenza it has been added to the list, resulting in the spike, but its not an actual spike in cases. As an aviation blog I feel this is a very important distinction to make.

Tom

It’s very painful to see this. Last time I flown on VN781 from HCMC to Melbourne and the economy class cabin on the A350 is pretty much not so full. It’s very rare to see it. I do understand the fears of Covid-19 but even everyone is in panic badly. I was plan to fly back to Vietnam but it is going to be hard for many airlines flying right now.