FINAL REPORT the impact of COVID 19 on the demand, supply, and market price of the aviation sector in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI UNIVERSITY OF LANGUAGES AND INTERNATIONAL STUDIES ******* ENGLISH FOR ECONOMICS FINAL REPORT The impact of COVID-19 on the demand, supply, and market price of the aviation sector in Vietnam Student’s name: Le Thi Thao Van Student 1806127 ID: BK - ENG 3072 Class: 01 Hanoi, 2022 Table of Contents Abstract 1 Introduction 1 .2Conceptual background Aviation 2.2 The role of aviation in economic development 3 Demand Analysis factors Impacts of Covid - 19 on the demand Supply factors side Impacts of Covid - 19 on the supply 3side 3.3 Impacts of Covid - 19 on price fluctuations 10 .4 Impacts of Covid - 19 on revenues Recommendation 4.1 Vietnam’s aviation development 12 14 target 14 Solutions to restore and develop Vietnam's Conclusion aviation 15 Reference list 20 21 Abstract Since the end of 2019, the SARS-CoV-2 strain has become a horrible obsession of the whole world because it has swiftly expanded throughout population communities and devastated practically every element of not only the economy but also social life For economies, the Covid-19 pandemic has caused difficulties for all actors involved in the economy, from large corporations to enterprises, and affects the employees directly involved in the production and business processes of enterprises The aviation sector is expected to be one of the businesses most affected by this epidemic The objective of this study is to analyze the damage after many waves of COVID-19 on the demand, supply, and market price of the Key words: Vietnam's Aviation, Covid - 19, demand, supply, aviation sector market price in Vietnam In general, the COVID-19 pandemic’s impact on the Introduction aviation industry Vietnam is the world’s seventh fastest-growing aviation in Vietnam is aAviation big concern, which may require a timely economic market generates huge revenue for destinations and contributes to policy response overall economic and financial scheme to better support aviation enterprises in development for a plethora of countries, especially the nations coping with the dependent on challenges during post-pandemic recovery international trade In other words, there is a strong link between aviation industry development and economic growth, which also stimulates the development of other 2009) related businesses and sectors in a country However, aviation In the service sector, there are many affected industries in is a vulnerable the first group, industry, whose estimated influence rate is which is the industry thataviation may crash due to potential risks such as global 100% (GSO, 2020) pandemics (Shakya A report by the International Civil Aviation Organization (ICAO) showed that global air passenger numbers will drop by 68% in 2020 due to countries 4.5 billion in 2019 closing borders andThe number of flights dropped sharply in March and April 2020 According to IATA, the1.8 global airline industry's passenger restricting travel Only billion passengers chose to travel by transport activity in plane, compared with72.8% yearSeptember 2020 fell on-year Figure 1: Number of commercial flights globally from January to December (2018 – 2020) (Source: General Statistics Office) In Vietnam, the COVID-19 pandemic and its impact on the aviation industry are major concerns due to multiple lockdowns imposed since 2020 Aviation activities in Vietnam in general particularly fell into a state of crisis and almost total paralysis until March 2021 Most of the services and activities associated with transportation, domestic and foreign transportation were stopped or interrupted, 19, the situation once again became a struggle, with a difficult which led torecovery devastating consequences, including a loss of revenue economic from the pandemic anticipated The Civil Aviation Administration for the aviation of Vietnam industry and a loss of jobs for workers From June 2020, the (CAAV), agency under the Ministry of Transport (MOT) that domesticthe tourism regulates the industry started to recover; however, with the impact of the next aviation waves of industry, COVID- provided that the number of air passengers in Vietnam likely dropped 46%aims to 43tomillion and Vietnamese lost more Thisby report also approach differentcarriers research directions than and $1.3methods billion orto worse in the revenues analyze influence of the Covid-19 pandemic on the aviation sector in Vietnam, recognize the challenge they are facing in aviation, and identify strategies to overcome short and long-term challenges 2 Conceptual background 2.1 Aviation According to research by Edwin D Phillips and Robert W Kaps aviation is (2005), defined as the knowledge and practice related to the use of an airborne vehicle for commercial, research, military or charity in the earth's atmosphere Aviation is a transport economic field that applies modern and hightech techniques with highly 2.2 The role international of aviation in activities, economic associated with safety and security, forcing development There is no denying that the aviation industry is the engine synchronous operations in a tight process of economic development One of the main reasons for this importance is the globalized nature of the industry, helping to connect different continents, countries, and cultures As a result, global aviation has been key in facilitating efficient travel to distant places, enriching many lives in the process As a driving force for socio-economic development, the growth of the regional aviation industry plays an essential role in the markets and locally in which it operates Regional aviation will not only improve The aviation industry alsotobeen a key lower-density contributor to connectivity between majorhas cities Vietnam's global locations buteconomic also prosperity, not onlyinternational as a result ofconnectivity the tourism to industry boosting promote Vietnam's regional and global local economies destinations Thebut also because it has allowed for improvements globaland trade key point of the aviation industry in economic in growth its The aviation limitless industry potential is plays aninimportant role in driving the growth tourism evident the industry's achievements before of thethe COVID-19 industry, pandemic.especially in developing countries Aviation carries billion passengers a year, 40% of international tourists now travel by air The air transport industry creates a total of 29 Domestic and international trade activities being million jobs globally 70% of businesses reportedare that using promoted to expand airline services is according to serve the trend of globalization, leading to theforgrowth inevitable to a large market Air travel accounts 10% ofof the air transport total trade revenue, system, specifically accounting inter-regional goods generate a significant source offor foreign currency revenue, and has 40% of export turnover a relatively goodThe impact on the economic situation of countries impact of aviation on the global economy is estimated at $2,960 billion, equivalent to 8% of the world's GDP The International Air Transport Association (IATA) showed that the air transport industry including airlines and supply chains contributes an estimated $2.6 billion to Vietnam's GDP Spending by international visitors contributed an additional $9.9 billion, bringing the total to $12.5 billion Revenues from the air According to the IATA report, the air transport industry has transport sector 2.2 and international visitors arriving by air accounted supported for a total of 5.2% million jobs Airlines, airport operators, airport businesses of the country's (restaurants andGDP retailers), aircraft manufacturers, and flight assurance service providers employ 42,000 people in Vietnam In addition, by purchasing products and services from local suppliers, the industry has also supported an additional 174,000 jobs Furthermore, the aviation industry is estimated to support an additional 182,000 jobs through This sector employee wages.will play an important role in creating economic value by creating As a result, part or all of these wages will be spent on consumer high-value and skill-demanding job opportunities, thereby goods and services contributing to the growth International visitors to Vietnam by air are estimated to support of economy an the additional 1.8in our country With its major contribution to the economy, the million jobs through expenditures that contribute to the local aviation economy.industry is the catalyst of sectors including (but not limited to) commerce, 2.3 Demand factors tourism, and social development Thanks to the positive impact of Economists use the term demand to refer to the quantity of a the aviation sector, good or service that arealso willing able to productivity buy at different otherconsumers industries will see and a long-term boost.prices in a given time, assuming other things are constant In this relationship, price means what a buyer pays for a unit of the specific good or service, also called the independent variable Quantity demanded is the total number of units purchased at the price - is the dependent variable Assuming all other things are constant, the quantity of a good or service demanded in a given period of time will increase when the price falls and conversely, will decrease when the price increases Here are some typical factors affecting demand: First, the price of goods and services affects the quantity demanded according to the law of demand When the price of goods and services increases, the quantity The second factor the price of related goods Two groups of demanded of goods andisservices decreases and vice versa related goods affect the quantity demanded of the goods under study: substitutes The next factor is consumer income According to Engel's law, and complements consumers will have different conceptions of the same good with different income levels Engel divides goods into two categories: (i) Goods for which, as income increases, the quantity demanded of the good increases; When income falls, the quantity demanded of a good is called a normal good (ii) Commodities when income Moreover, increases, the the taste is the preference or interest of a group of people about quantity demanded of goods decreases; When income falls, the certain goods and services that affect consumer psychology Taste quantity demanded determines the of a good increase is called a good the size of the Besides, the consumers number ofsecondary buyers reflects type of goods that want to buy market The more consumers in the market, the greater the demand for goods and services The fewer 2.4 Supply in factors consumers the market, the smaller the demand for goods and services Supply is the quantity of a good/service that sellers are able and willing toin sell at different prices a given period of time assuming other things constant (ceteris paribus) Meanwhile, quantity supply reflects the quantity of a good or service that sellers are willing and able to sell at different prices during a given period of price time, of goods and services affects the quantity supplied The according the remain constant Some factors that affect assuming other to things supply, including: law of supply When the price of goods and services increases, producers will Themore prices of products affect ofprofit production produce goods to put ondirectly the market to the earncost more and and thus the vice versa quantity of a good that producers are willing to sell Government policies such as legal policy, tax policy, and subsidy policy all have a strong impact on the quantity supplied When government policy favors producers, producers are encouraged to produce, causing the quantity supplied to increase and the supply curve to shift to the right and vice versa The number of sellers has a direct effect on the number of goods sold in the market When there are more sellers, the quantity supplied increases, causing the supply curve to shift to the right and vice versa Analysis Before the pandemic happened, Vietnam's aviation market was considered a " gold" market The Civil Aviation of Vietnam shows transport market continuously hasAdministration high growth, with an average that the air growth rate of 20.5% in passengers and 13.2% in cargo (period 2014 - 2018) In 2019, the growth rate will continue to be maintained at double digits with a growth rate of 11.8% in passengers and 3% in cargo compared to 2018 Total passenger transport reached 78.3 million passengers and freight reached more than 1.25 million Not only the growth in tourists, but Vietnam's aviation also increased by 11% compared to 2018 in terms of goods (1.5 million tons) According to the International Air Transport The Association COVID-19 pandemic is having an enormous impact on aviation (IATA),the Vietnam is recognized as one of the fastest growing aviation markets the industry,inaffecting passenger traffic, air cargo demand, price fluctuations, world and theand fastest in Southeast Asia with an average growth rate of 15.8%/year 3.1 Impacts of Covid - 19 on the incoming revenues spread of side the to COVID-19 epidemic has caused international Itdemand is expected average growth ratemany of over 10% in the The order toachieve restrictan flights, social distance, and social isolation and domestic next andthe toyears prevent flights to close The aviation industry is one the industries that reach 150 million passengers transported byof 2035 have suffered the most damage under the impact of the Covid-19 pandemic, the volume of air transport has continuously decreased deeply, specifically compared to the same period in 2019; Domestic visitors decreased by 24%, leading to many negative impacts on the production and business activities of enterprises in the industry In the first months of 2020, the number of passengers transported by air only reached 22.5 million passengers, decreasing 45.5%, and rotated 25.4 billion passengers, down 55.9%; freight transportation reached 196.6 thousand tons, decreasing 39.4% and 2.6 billion tons, decreasing 54.2% Figure 2: Air passenger transport in the months of 2019 and 2020 (Thousand passengers) (Source: General Statistics Office) Specifically, according to the General Statistics Office, international visitors to Vietnam in the first 10 months of 2020, were estimated at more than 3.8 million arrivals, down 73.8% over the same period last year Statistics of the National Administration of Tourism show that in the first 10 months of 2020, domestic tourists reached 42.5 million (down 41% over the in 91% With the reopening of domestic routes fromsame Aprilperiod 23, 2020, 2019) After ceasing the numberhas of gradually improved, however, until July 28, passengers international and to/from domestic flights at the end of March, the number passenger flights of passengers in Da Nang were requested to be temporarily suspended April decreased byto 88%, exploitation (due the and in May, the number of passengers dropped sharply by appearance of a new positive case in Da Nang) has reduced the number of passengers From September 8th, flights to/from Da Nang will be opened, and the number in transit of passengers will gradually increase, but still at a very low level compared to the same period last year due to international flights (accounting for about 60% of the total number of passengers rotated transfers of Vietnamese airlines in 2019) have not yet been reopened With the complicated development of the epidemic, domestic and international arrivals fluctuated greatly According to the Ministry of Transport, in 2020, the volume of goods through Vietnam's airports is estimated at 1.3 million tons, down 15.6 % The reason is due 19 epidemic, and the restriction of air transport activities to prevent to thespread trade of situation, the fluctuating supply and demand of goods the the disease due to the COVID Figure 3: Vietnam's air cargo volume in the period 2009-2020 (Source: Ministry of Transport) This is the first negative growth since 2009, but lower than the sharp decline of the transportation and passenger services segments The cargo terminal service segment is least affected by the COVID-19 epidemic as cargo planes are still maintained to ensure the supply of goods and maintain production and business activities in the world Accordingly, in the first months of 2020 net Gross profit margin decreased compared to previous years revenue of the because businesses cargo terminal segment decreased by 8.2% due to the decrease in had support airlines such as supporting cargo storage cargopolicies volumetodue fees for delayed, to the COVID-19 epidemic 3.2 Impacts of Covid - 19 on the activities canceled flights and other related supply side At that time when the Covid epidemic was the most complicated and dangerous, the price of services in the aviation sector dropped to the bottom As a result, airlines were forced to close many routes and reduce the number of domestic and international flights In the first 10 months of 2020, according to data from CAAV, the total number of flight transfers made by airlines was 185,870 flights, down 30.5% over the same down period54% in 2019 The strongest decrease 13,711 flights, Vietnam Airlines and VietJet belonged Air also to Jetstar Pacific with decreased 24.7% and 39.1%, by respectively In contrast, Bamboo Airways is the only airline with a growth 2019 in the number of flights with 21,339 flights, up 48% over the same period in Figure 4: Number of flights by Vietnamese airlines in the first 10 months of 2019 and 2020 (Source: Civil Aviation Authority of Vietnam) Besides, the market share of airlines also changed significantly Specifically, Vietnam Airlines has surpassed VietJet Air to return to the leading position in the aviation industry with 39.6% market share, up 3.1 percentage points over the same period last year Meanwhile, VietJet Air only accounts for 37.6% of the aviation market share, down 5.3 percentage points over the same period Besides, Bamboo According to the Airports Corporation Vietnam (ACV), Airways continues to show strong growth inof the business whenin May 2021, the increasing its market total number of takeoffs and landings at Noi Bai and Tan Son Nhat share to 6.1 percentage points over the same period in 2019 and airports dropped reaching 11.5% to a record low On May 23, Sonlargest Nhat airport 173market flights; market share, becoming the Tan second airlinehad on the Noi Bai airport had 101 flights - while on May 26, Tan Son Nhat only had 122 flights and Noi Bai airport only had 92 flights The data shows that the pandemic had a substantial negative impact on flight volumes for a prolonged period; this had a massive knock-on effect on global 3.3 Impacts Covidand - 19 on price business andof travel tourism fluctuations After waves of epidemics with serious impacts on the economy socialin the aviation industry also experienced life, the price and situation unpredictable fluctuations The number of passengers passing through the airports has dropped to a record level, and airfares have also hit the bottom for many months the context Thein system of many airlines such as Vietjet, Vietnam Airlines, Bamboo, of the complicated developments of the Covid-19 epidemic in many localities Pacific Airlines and Vietravel Airlines has recorded the cheapest fares for the Ho Chi Minh City - Hanoi tours departing in early June 2021 Some airlines sell tickets including taxes andatfees of less than 500,000 For example, Vietjet, a series of ticketsVND/way; priced at Popular 49,000 pricesVND/way include taxes are open andsale feesfor from - 800,000 VND/way for theabout whole450,000 trip between Ho Chi Minh City and Hanoi, excluding taxes and fees Starting in June is also very cheap, from only 450,000 VND/trip including taxes and fees 10 Figure Vietjet Air ticket price list in August and September 2021 (Source: Vietjet.net) At that time, Vietnam Airlines opened the sale of preferential tickets on most domestic routes with unprecedented from onlyand 39,000 VND 613,000 VND including taxes and fees)prices, for short flights 99,000 (equivalent to VND (equivalent to VND 613,000) equivalent to 679,000 VND including taxes and fees) for a long flight Pacific Airlines also sells air tickets for only 9,000 VND/way (equivalent to 580,000 VND including taxes and fees) throughout its domestic flight network program appliesThe to tickets purchased and departed from now until June 30 In general, airfares on the routes between Ho Chi Minh City to Hanoi, Da Nang and Phu Quoc have fallen sharply compared to the previous period and almost bottomed for many To protect people's health, the Government has implemented policies to restrict months entry and close borders between countries to prevent the 11 maximum spread of Coronavirus Due to the increasingly complicated epidemic situation, many airlines have to announce that they will suspend some international and domestic routes They offer policies to support customers through ticket refunds and flexible flight 3.4 Impacts of Covid - 19 on revenues changes to the of epidemic situation.pandemic are also Theaccording severe effects the COVID-19 reflected business resultsinofthe airlines and air service businesses According to IATA, the Covid19 pandemic caused aviation industry revenue to drop by 80% in 2the first half of 020, while still having to cover costs related to crew, maintenance, and aircraft maintenance fuel, airport fees, The International Air Transport Association (IATA) forecasts that the worldin 2021 will only be 33% compared to 2019 The passenger volume loss of airlines is estimated to reach 95 billion USD, nearly double compared to the forecast in December 2020 The speed of recovery depends on how successful countries are in deploying COVID - 19 vaccines Bui Doan Ne, Vice President cum General Secretary of VABA showed that due to the heavy impact of the COVID-19 epidemic TheVietnamese financial report forhave the suffered third quarter showed in 2020, airlines a lossof of 2020 over 18,000 billionthat VNDVietnam from Airlines' net revenue fromand sales and service providers to transportation activities revenue decreased by continued about decline sharply, 100,000 billion VND 3,200 billion VND, in the same period last year, the profit was equaling 1⁄4 compared to the same period in 2019 Gross profit equivalent 3,300 compared toto 2019 billion VND After deducting expenses, Vietnam Airlines recorded a recorded a loss of loss of 3,942 billion VND in the same period in 2019 and recorded a profit of 1,506 billion VND In the months of 2020, Vietnam Airlines recorded a loss of 10,504 billion VND Total revenue and other income in the third quarter of 2020 of the parent company decreased by 66%, of which domestic passenger revenue VietJetbyAir had and to face the industry's general difficulties decreased 34,8%, when it also international revenue dropped sharply by 95.4% In addition, announced less satisfactory business results in the first months of subsidiaries related to 2020 with a loss providing aviation services also saw 12 a sharp drop in profits such as Vacs, Vigas after tax of 971 billion VND Airline service businesses are also not immune to losses or reduced profits However, the situation still has more optimistic signals than airlines Specifically, Noi Bai Aviation Catering JSC (NCS) lost 26 billion VND, Taseco Aviation Services JSC (AST) lost 32 billion VND, Cam Ranh International Airport Services JSC (CIA) lost 10 billion VND, and JSC Airport Services Da Nang (MAS) lost billion VND These are all units facing difficulties throughout 2020, some providing direct services to flight passengers, others operating at local airports when the number of international arrivals nears zero Airports Corporation of Vietnam (ACV), which manages and operates 20 airports across the country, recorded a profit of 156 billion VND, down 94% over the same period Saigon Ground Services Joint Stock Company (SGN) also decreased at the same rate, making a profit of only billion VND Figure 6: Profits of airlines in the first months of 2020 (billion VND) FiinPro) The least affected by the(Source: pandemic hit are businesses providing cargo services at airports because they are typically not affected as badly as passenger transport Profit before tax of Noi Bai Commodity Services Joint Stock Company (NCT) in the third quarter of 2020 reached VND 69 billion, down 8%; while Saigon Cargo Services JSC (SCS) reached 124 billion VND, down 9% Relatively severely affected groups include Tan Son Nhat Airport Services Joint Stock Company (SAS) and ASG 13 Group Joint Stock Company (ASG) which lost 50-60% of their profit in the third quarter of 2020 In general, 2020 and the first half of 2021 are difficult years for Vietnam's aviation industry Vietnam's aviation industry experienced a period of explosive growth from 2013 to 2016 However, 2020 is also the first year to witness a decline in Vietnam's aviation industry since Vietnam's integration into the world economy The recovery and re-development of the aviation industry still depend heavily on the Recommendation epidemic situation, the speed ofaviation vaccination, and is the plans andmain In 2019, the international industry one of the policies of enterprises driving forces for the world's development, connecting countries, and and the government territories because this industry created 87,7 million jobs, contributing 4,1% of global GDP In Vietnam, the aviation industry plays a connecting role between our country and the world, directly promoting tourism development, to which the tourism industry contributes 8,8% of the country's GDP To recover the aviation industry, Vietnam 4.1 Vietnam’s needs to takeaviation development target It is because of the specific that thethat aviation industry is appropriate measures based on nature the solutions the world hardest hit by aviation the shutdown industry of globalization is due to the travel restrictions caused by the COVID-19 effectively implementing pandemic However, the industry is forecast to be the first and fastest to recover from the crisis because of its importance to economies around the world Therefore, experts say that the aviation completelyspecific ready Airports Corporation of industry Vietnam must (ACV)bedetermines whentasks the pandemic in the is over.2021 to 2025: period Firstly, production and business targets: Based on the situation that theincovid19 epidemic the world is brought under control and control in 2021, the average annual growth rate will reach: 11-13%/year Passenger service output; 12 - 15%/year Output serving goods;1810 - 12%/year; Number of landings and 15%/year of revenue; - 20%/year Profit take - offs; before tax 13 - 14 Secondly, the plan for investment development, management, and operation: By 2025, ensure investment, upgrade, expand, effectively 23 airports with anew designed capacity of 173 million manage and exploit passengers/ year With a population of about 100 million people and one of the fastestingrowing economies Southeast Asia, Vietnam needs to increase the capacity of its aviation industry to meet its planned air transport demand, in line with the country's projected Despite continuing be affected the COVID-19 pandemic, economic growth of 6,4%to between 2021by and 2030 the aviation industry began to show signs of recovery by the end of 2021 thanks to a nationwide vaccination program and strict prevention regulations The fight against COVID-19 is strictly implemented to ensure safe operation and protect the health of passengers and crew From the above positive signals, IATA forecasts that in 2022, the domestic aviation market will recover about 93% The plan to recover the domestic market in According the assessment of the leader of the Vietnam is 96%,tohigher than the average forecast TheCivil Aviation Authority of International Air Transport Vietnam, the(IATA) Government to reopen international Association reportedhas thatdecided just released in early March 2022, commercial routes the aviation 2022 In addition, the gradual loosening of COVID-19 prevention from 15recover to restore and tourism reopen tourism market will fully withtrade the total number and of passengers and February control has created favorable for international passenger transport from March expected to 15, reachconditions to be smooth and billion by 2024, surpassing the period before the COVID-19 domestic outbreak passenger transport to be restored, contributing to an increase in output 4.2 Solutionspassenger to restore and and cargo develop Vietnam's in the first quarter international transportation aviation of 2022 • The direction and support of the Government and Departments due to business stagnation, the biggest most airlineFirstly, businesses are facing during this period and is financial serious problem that problems The Government should develop specific policies to remove difficulties for the aviation industry and review, and properly handle the law on discounts, fees, charges, and expenses of the aviation industry In addition, to save the aviation industry from this burden, in addition to providing relief packages, the state should 15 implement policies to exempt or reduce import tax, environmental protection tax on jet fuel, reduce or suspend corporate income tax, personal income tax, foreign contractor tax for transactions taking place during the epidemic period The Government needs to direct the Ministry of Transport to allow the extension of the time to reduce 50% of the fees for take-off and landing services and flight control services along with the time to apply the minimum price of VND for services, specialized aviation and services on thebelieves list of state-specified The Ministry of Planning Investment that the price Ministry bracketsof Finance until the of 2021 needs to end amend Decision No 87 on margin trading conditions to allow airlines and businesses directly affected by COVID-19 Accordingly, these businesses will not be cut off from margin trading whenhas theirsolutions profits are negative for Currently, the Government to support two consecutive businesses such as quarters and reduction of some taxes and fees The State Bank exemption also promptly issued directives for commercial banks to develop supporting policies enterprises, restructuring sourcestoand These policies Actively debt responding thereducing policy ofloan the interest Government and the are put in place State Bank of to ensure(SBV), cash flow to maintain production recoveryto and restore Vietnam to support the business community overcome services difficulties caused by the Covid-19 pandemic, recently, Saigon - Hanoi Bank (SHB) was one of three commercial banks to sponsor Vietnam Airlines Corporation – Vietnam Airlines with a total credit limit of 4,000 billion VND This is one of the specific and practical actions that SHB has continuously implemented since the outbreak of the epidemic, to stand together with customers and the community to cope with difficulties The most important thing is that firms need to get low-interest loans, followed Accordingly, three banks including Saigon – Hanoi Bank (SHB), Southeast Asia by tax and fee exemptions and reductions The Ministry of Planning and BankInvestment (SeaBank), and Maritime Bank (MSB) pledged to finance loans Vietnam is alsofor drafting a document to propose the Prime Minister direct the State Bank to amount of 4,000 billion VND from the Airlines with a total refinancing source of 16 study and submit to the the Government for promulgation a mechanism towhich, support State Bank, in SHB sponsored a credit limit package of 1,000 billion VND interest rates of about 4% for credit loans in 2021 - 2023 for financial institutions Airlines to help private airlines settle liquidity, and maintain resources to operate and develop after the Covid-19 epidemic Secondly, as soon as the epidemic situation is under control and domestic and international flights are reopened, departments should step up the implementation of national tourism promotion activities In particular, the focus should be on coordinating with professional associations in tourism to develop and implement a program to stimulate domestic tourism, strengthen communication and promote new products to attract international tourists, focusing on strongly developing domestic Thirdly, the Government needs and tourism in regions and regions of to thepromote country.vaccination Vietnam needs vaccine passport to strengthen issuance Currently, compared to other has a low communication about safe tourism andcountries, a friendlyVietnam and responsible vaccination rate national image Right in Southeast Asia, as of June 9, 2021, Vietnam is the associated with positive results in COVID-19 prevention andlast control, country the process which is in highly of vaccination COVID-19 appreciated byagainst international organizations and communities Figure 7: Vaccination rate chart in Southeast Asian countries (%) (Source: VNVC) Therefore, the Government as well as the Ministry of Health need to actively negotiate with other countries, to quickly access the source of COVID-19 vaccine and promote the supply of the best vaccine to the Vietnamese people In addition, the Government can proceed with a plan to provide vaccine passports to vaccinated 17 citizens to people who have been vaccinated It is easier for people to travel to other countries without needing to be quarantined • Plans for the aviation industry and aviation enterprises First, the world's volume of goods transported by air is expected to recover at of transport The reason is that a faster rate than other forms companies promote air freight to quickly meet increased consumer demand after the epidemic With the recovery of world trade and cargo flights still operating, passenger planes are used to transport goods.before Airlines increase of the Secondly, thecannot negative effectsthe of conversion COVID-19 on passenger aircraft to revenue of the cargo aircraft to increase revenue aviation industry, the policy of reducing personnel has been applied by airlines However, this measure will lead to inevitable consequences in the future, which is costly and timeconsuming to recruit and train qualified new employees This also adversely affects business activities in the post-pandemic period The proposed Third, expand domestic international solution is not to make staff and reductions, but toflight givemarkets employees During the epidemic quarterly rotating period, the measure of need reducing flight or routes by leave Thus, there is no to recruit train was new applied employees airlines, but this while ensuring the seriously thefor revenue of airlines Faced with that quality of affected employees future business activities situation, the proposed solution is to exploit new flight routes in the future, when the epidemic is under control With the current trend of restructuring, the domestic service tourism industry is on a strong development momentum, the domestic routes are Based potential on the latest report from CarTrawler in collaboration completely with IdeaWorks markets In addition, international flight routes also need to be Company, results confirm that the Covid-19 pandemic has researchedthe and significantly changed exploited more, especially in countries that have good disease the way In the aviation control the long industry operates in many aspects in the long Airlines term,term the need to move between countries and territories is need to focus research on prospects coming from a core increasing, nottheir decreasing product, which is the Vietnam Airlines has actively launched a stimulus program in destination Therefore, the airline's exploitation of routes after the all three areas: pandemic wave domestic, and international visitors 18 to Vietnam (inbound), and cannot ignore potential destinations Vietnamese people traveling abroad (outbound) Accordingly, the airline is committed to reducing domestic fares by up to 50%, focusing on routes with great demand to increase efficiency The airline is also promoting the plan to open a direct route to India, and continue to expand its flight to Australia because these Fourth, improving the network service quality Besides expanding are two potential the market, destinations, determined focus promoting improving service quality to plays anon important roleshortly in the development of the aviation industry It can be seen that when the global pandemic ends, people's travel needs will increase rapidly In that situation, Vietnamese airlines urgently need to ensure and improve service quality such as expanding terminals and airports, upgrading infrastructure to overcome overload; strengthen the development of utilities for passengers, such as applications to support ticket purchase, flight tracking, update information about canceled flights or Aviation promotions and of According to the leader of the Civil Authority promotions of solutions airlines Vietnam, Moreover, upgrading the boarding process will helpTo passengers on taxes, fees and prices are extremely necessary handle thisfeel more secure, and problem, businesses 800 milliontechnology shares to existing shareholders to increase charter touchless iscapital an effective choice that needs to be applied can raise their charter by issuing shares In 2021, Vietnam capital As a result, at airports suchdoes not suffer from negative equity, helping this business Airlines offered the company to as contactless check-in, purchasing contactless shopping and payment, touchless supplement capital for production and business activities and cover cash flowclaim, deficit, baggage Last but not least, the Civil Aviation Authority of Vietnam supporting liquidity needs maximum and practical support so that businesses can transform, restructure the market, and even convert aircraft from passenger to cargo The overall corporate restructuring plan for the 2021-2025 period is expected to be a key solution to help aviation businesses improve operational efficiency, strengthen financial Specifically, the restructuring plan was developed by aviation capacity, and enterprises in gradually recover and prepare resources to develop after the all fields, including solution groups such as fleet restructuring; epidemic is under 19 capital restructuring control, emphasized the leader of Vietnam Airlines through issuing more shares to increase charter capital, raising capital from outside, issuing bonds; develop different scenarios to manage production and business while continuing to promote freight transport to increase revenue, to quickly recover and break through the post-COVID-19 period, thereby contributing to Conclusion development There haveofbeen devastating effects of the global Covid-19 socio-economic the country pandemic on all countries, not only affecting health but also negatively affecting the economy and social security The COVID-19 pandemic has inflicted serious and widespread impacts on a wide range of economic sectors, particularly the aviation industry The stagnation in operations, especially the negative effects on the demand, supply, and market price of the aviation industry are heavy losses for this sector Support during the epidemic is important, but to recover the and restrain the economy, the Vietnamese economy When the epidemic is under control, the support the epidemic is decisive In which, it is important to aviation after industry provide long-term needs to soon recover and develop again support, not only tax and fee exemption and reduction, but also the establishment of routes, flight operations and especially loans for airlines to supplement the lack of This report is not without its limitations, based on objective capital lostavailable during the temporary shutdown due to the epidemic to data with restore production the understanding and knowledge gained from the subject of and business English for economics The solutions suggested in the report are only from a personal perspective and have not been censored by any organization To sum up, we also believe and look forward to the recovery and development of Vietnam's aviation industry after the Covid 19 pandemic 20 REFERENCE LIST Czerny, A I., Fu, X., Lei, Z., & Oum, T H (2021) Post pandemic aviation market recovery: Experience and lessons from China Journal of Air Transport Dube, K., Management, Nhamo, G., &90, Chikodzi, 101971.D (2021) COVID-19 pandemic and prospects for recovery of the global aviation industry Journal of Air Transport GSO (2020) Report the influence Management, 92, 102022 of Covid-19 on enterprises Retrieved from: https://www.gso.gov.vn/dulieu-va-so-lieu-thongke/2020/07/%20toa-damdanh- gia-tac-dong-cuadai-dich-covid-19-den-doanhnghiep-viet-nam/ International Finance Corporation (2020), 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Virtual Economics, 3(4), 91-105 Smith, K M., Machalaba, C C., Seifman, R., Feferholtz, Y., & Karesh, W B (2019) Infectious disease and economics: The case for considering 10.multisectoral Tisdall, L., Zhang, Y., &One Zhang, A (2021) COVID-19 impacts impacts Health, 7, 100080 on general aviation – Comparative experiences, governmental responses and policy imperatives Transport Policy, 110, 273–280 21 Tài liệu Tiếng Việt Đặng Anh Tuấn (2020), Vực dậy ngành hàng không sau đại dịch TạpCovid-19, chí Cộng sản Lan Chi (2021), Khủng hoảng ngành hàng không bão dịch, Báo Cộng sản Việt Điện tử Đảng Nam Thái Phương (2021), Nhu cầu giảm mạnh, giá vé máy bay chạm đáy, Người lao Báo động Tổng công ty Cảng hàng không Việt Nam (2020), Báo cáo thường 2020 niên năm Tổng công ty Cảng hàng không Việt Nam (2020), Phương hướng, tiêu, nhiệmmục vụ giai đoạn 2020 - 2025 22 ... words: Vietnam'' s Aviation, Covid - 19, demand, supply, aviation sector market price in Vietnam In general, the COVID- 19 pandemic’s impact on the Introduction aviation industry Vietnam is the world’s... According to the International Air Transport The Association COVID- 19 pandemic is having an enormous impact on aviation (IATA) ,the Vietnam is recognized as one of the fastest growing aviation markets... billion VND in the same period in 2 019 and recorded a profit of 1,506 billion VND In the months of 2020, Vietnam Airlines recorded a loss of 10,504 billion VND Total revenue and other income in the