With only 12% market share of air cargo, Vietnamese aviation is at a disadvantage.

At the conference on logistics and air cargo on August 17, businesses and experts in the field all assessed the development potential of the industry in Vietnam. However, the biggest obstacle is the infrastructure factor.

Mr. Do Xuan Quang, Deputy General Director of Vietjet Air, gave figures that the Vietnamese air cargo market has grown on average 5-6% per year over the past 10 years. The volume of goods passing through domestic airports is about 1.4 million tons; of which, 200,000 tons are domestic goods, 1.2 million tons are international goods.

The volume of air freight accounts for less than 1% of the total volume of goods transported, but contributes up to 25% of the total export value. This shows that air cargo specializes in transporting high-value goods, electronic equipment, time-sensitive goods...

For example, every week, Samsung in Vietnam transports about 3,000 tons of phones and electronic products. These are all high-value goods, but Korean Air and Asiana Airlines transport them all. Vietnamese airlines cannot compete.

According to experts, infrastructure is a major bottleneck for air cargo development. (Photo: BTC)

According to Mr. Quang, if calculating the total volume of goods transported from domestic to international, Vietnamese airlines only account for 12% of the market share, the remaining 88% belongs to foreign airlines.

The reason is that your country has a fleet of specialized cargo planes, with a cargo capacity of up to 100 tons, for large packages. Meanwhile, Vietnam does not have specialized cargo planes, and must use the belly of passenger planes to carry more cargo, with a small capacity, mainly vegetables, tubers, and fruits, with low value.

For example, a phone costs 1,000 USD, while 1kg of agricultural products costs a few USD. This is a big difference.

"Domestic airlines find it difficult to invest in more cargo planes due to limited infrastructure. Currently, the total number of aircraft of domestic airlines is about 250, while Tan Son Nhat airport has 82 parking spaces. Many planes that arrive at their destination just circle in the sky, waiting for other planes to take off before they can land," said Mr. Quang.

"Vietnam has a geostrategic position in terms of transportation and logistics connectivity in the Asia- Pacific region. However, for a long time we have not been able to become a transit point for goods like Singapore, Kuala Lumpur (Malaysia), Bangkok (Thailand), Hong Kong (China). Infrastructure has not kept up with development," he analyzed.

Singapore is ranked first among 179 countries in the World Bank's Logistics Performance Index (LPI), said Michael Wilton, CEO of MMI Asia. In the LPI, the country scored highest in the categories of service quality, capacity and logistics infrastructure.

Mr. Nguyen Cong Luan, Deputy Head of Import-Export Management Department, Ho Chi Minh City Department of Industry and Trade, informed that 60% of logistics costs are related to transportation. If the current traffic situation can be resolved, the logistics industry in general and air cargo in particular will develop strongly.

In Ho Chi Minh City, the locality has a project to build 7 logistics centers from now until 2030; find land funds in industrial parks to expand warehouses for businesses to use, and promote freight forwarding services.

Expressing optimism, General Secretary of the Vietnam Logistics Services Association (VLA), Mr. Nguyen Duy Minh, cited data from JPMorgan, saying that by 2025, Apple will move 20% of its iPad production line, 5% of its MacBook, 20% of its Apple Watch and 65% of its iPod to Vietnam.

"These are high-value items that must be transported by air. When the above electronic equipment production lines return to Vietnam, the domestic air cargo industry will have more opportunities," said Mr. Minh.

World airlines make big profits, domestic airlines still struggle . With strong demand for travel, combined with falling fuel prices, international aviation giants reported big profits in the first half of 2023. However, domestic airlines are still struggling.

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