Vietnam Airlines Counts The Cost Of Coronavirus Impact

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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.

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.

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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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