Air Asia, Malaysia’s successful budget airline, signed a letter of intent with Vietnam’s Vinashin Group
in September to set up a new low cost airline. T A joint venture was to be set up with an initial capital of
US$30mn to establish a low-cost operator in Vietnam based on AirAsia’s successful business model.
Tony Fernandes, Air Asia’s chief executive officer, said that his company saw Vietnam as a potential
tourist destination with Hanoi as the hub. With 84mn people in Vietnam and the fact that it was situated
beside China with its billion-plus population, the potential for air travel was huge, Fernandes said. The
new airline, to be called Vina Air Asia, was expected to begin operations in July 2008, most possibly
flying routes from southern China to its operating hub in Hanoi. Separately Vietnam was expected to
issue new regulations allowing foreigners to own up to 49% of local airlines, according to reports in May.
In May 2006, the legislature passed an Aviation Law allowing locals and foreigners to participate in air
transport operations in the country. Taking these developments into consideration, along with the growth
of demand, BMI’s newly-released Vietnam Freight Transport report concludes that airfreight traffic will
increase by an annual average of 12.0% in 2007-2011, measured in tonnes per km.
A number of factors underpin our optimism. One is the realistic prospect of a long export-led boom in
Vietnam, with GDP growth likely to average 8.4% in 2007-2011, up from 7.8% in the preceding five-year
period. Vietnam Airlines is poised for strong growth. Infrastructure plans are also ambitious. The
government has announced plans to build the country’s largest airport at Long Thanh in the southern
province of Dong Nai, at an estimated cost of nearly US$8bn. Noi Bai International in Hanoi will also be
modernised, with a new runway and the enlargement of the cargo terminal.
Our overall outlook for the nascent freight transport industry across the different modes is bullish. In road
haulage, we have trimmed our forecast to take account the effects of high oil prices and continuing
infrastructure bottlenecks. But we still see road-freight turnover running ahead of the general rate of
economic expansion in Vietnam. We see it growing by an annual average of 10.8% over the next five
years, followed closely by maritime freight (10.4%), pipeline throughput (9.7%) and rail (9.3%). Full
World Trade Organisation (WTO) membership, achieved in early 2007, can be seen as supportive of
greater freight transport turnover relative to GDP across all modes, particularly so for shipping. We now
expect total freight carried growth across all modes, measured in million tonne-km (mntkm), to average
10.2% per annum in 2007-2011.
Under BMI’s freight transport business environment rating system, Vietnam achieves a composite score
of 45 out of a potential maximum of 70. Vietnam’s stronger points are freight growth, transport
infrastructure growth and the transport intensity index, which measures the dynamism of the country’s
foreign trade. BMI views Vietnam as being weaker in the other four categories: economic and political
long-term risks and the country’s regulatory and competitive environment (corruption is a particular
problem).
According to our latest estimates, the total value of transport and communications GDP will rise to
US$5.1bn in nominal terms by 2011, representing 4.3% of Vietnam’s GDP.
|
0 items
