Industry

The Hanoitimes – The volume of passengers in 2020 would plunge 46% to 43 million passengers compared to 2019, according to the Ministry of Transport.

The Vietnamese aviation market would suffer more damages than any estimations made so far due to the Covid-19 pandemic, according to the Ministry of Transport.

An airplane of Jetstar Pacific. Photo: Vietnam Airlines

The ministry has said in a report sent to the prime minister that from April 1 to 23, the number of air travelers was only equivalent to 1-2% of the total before the pandemic. Most of the airplanes are grounded.

Flag carrier Vietnam Airlines Corporation (VNA) announced its consolidated revenue in the first quarter decreased by 26% year-on-year. The Airports Corporation of Vietnam, which manages 21 airports across the country, also saw a decline of 24% in revenue .

Vietnam Air Traffic Management Corporation (VATM), which provides navigation services to Vietnamese and foreign airlines, saw its revenue drop 60% in the January-March quarter.

The volume of passengers in 2020 would plunge 46% to 43 million passengers compared to 2019, worse than any forecast scenarios, said the ministry.

Earlier, the Civil Aviation Authority of Vietnam (CAAV) estimated in the most optimistic scenario where the pandemic is contained in April, the number of air passengers would fall 15.4% year-on-year to 67 million. In a second scenario with the pandemic being controlled before June, total passengers of the market are predicted at 61.2 million, down 22.6% year-on-year.

With the unexpected losses, the ministry has proposed many solutions to support the aviation industry, including the resumption of the flight routes and the increase of frequency of domestic flights from April 23.

The ministry kept requesting the prime minister to provide financial and tax support policies for local transport businesses.

The Hanoitimes – The main goal is to minimize losses for the state budget and ensure lawful rights for workers, national security and defense, Prime Minister Nguyen Xuan Phuc has said.

Inefficient projects must be dissolved or filed for bankruptcy in compliance with current legislation to retrieve state capital as much as possible.

Prime Minister Nguyen Xuan Phuc at the meeting. Photo: Quang Hieu

Prime Minister Nguyen Xuan Phuc stressed the view at a government meeting discussing 12 ineffective and stagnant projects in the industry and trade sector on March 3.

At present, three projects have been taken out of the monitoring list of poor-performing ones, including the DAP1 Hai Phong Fertilizer Plant, Ethanol Binh Phuoc and Ethanol Phu Tho, for  becoming profitable.

A report from the Ministry of Industry and Trade (MoIT) informed other projects are in operation but face large amount of accumulated losses, some  are underway or being put on hold.

One of the major obstacles preventing the state from withdrawing its capital in these projects is the ongoing legal disputes regarding the value of Engineering, Procurement and Construction (EPC) contracts for five projects.

As these loss-making projects are putting huge burden on the state budget, PM Phuc urged government agencies to take drastic measures to resolve the issue, asking the MoIT to submit a solution for the Phuong Nam Pulp Factory before March 10.

While the government stands firm on its stance of not pumping additional capital into those ineffective projects, Phuc requested the Committee for Management of State Capital at Enterprises (CMSC) to propose detailed solutions for the government to consider.

“The main goal is to minimize losses for the state budget and the economy in overall, at the same time ensuring lawful rights for workers, national security and defense,” Phuc said.

As of last October, total accumulated losses of 12 projects had reached VND26.3 trillion (US$1.14 billion).

The 12 loss-making projects include four in fertilizer production, three in biofuel production, two in steel manufacturing, one in polyester production, one in pulp and one in shipbuilding.

The Hanoitimes – The revival of the aviation industry was a result of efforts by the government and the tourism industry to stimulate domestic travel.

With the social distancing orders loosened on April 23 after Covid-19 was contained, airports in Vietnam became busier in May, with air passengers jumping 14.3-fold from a month earlier to a total of 2.88 million.

Source: Civil Aviation Authority of Vietnam. Chart: Nhat Minh.

The revival of the aviation industry was a result of efforts by the government and the tourism industry to encourage businesses to offer promotional packages that stimulate the demand of domestic travelers while borders remain closed to foreigners.

However, compared to the May 2019, the number of passengers fell 70% due to the suspension of foreign entry and travel restrictions to curb the spread of Covid-19, according to the Civil Aviation Authority of Vietnam.

In May, the number of international passengers dropped 97.6% year-on-year to just 78,000 while the number of Vietnamese passengers decreased by 56.6% to 2.8 million.

In particular, Vietnamese airlines transported 78,000 international passengers and 2.8 million domestic passengers in May.

Source: the CAAV. Chart: Nhat Minh.

On May 25, the government decided to issue e-visas for citizens of 80 countries from July 1. This would lay a foundation for welcoming foreign tourists again.

Vietnam is expected to be the first countries in the world to open up to foreign tourists, according to WeSwap, the UK’s largest P2P travel money provider.

Vietnam has had one of the lowest cases and death rates in the world, despite sharing a long border with China. The country has had just over 320 cases and zero deaths. It has gone 41 days without community infection as of May 26.

The Hanoitimes – The potash salt mine project in Laos became the 5th loss-making project of Vinachem and the 13th projects of Ministry of Industry & Trade sustaining loss of hundreds of millions of dollars.

“Another loss-making project has resurfaced in the name of potash salt mine project in Laos,” said the Vice Minister of Industry & Trade Do Thang Hai at the Vietnam National Chemical Group (Vinachem)’s year-end meeting on January 19 to prepare its targets for 2018.

Along with the potash salt mine project, Vinachem currently has to deal with other 4 projects sustaining loss of millions of dollars, namely Ha Bac Nitrogenous Fertilizer and Chemical, DAP-Vinachem, DAP No. 2 – Vinachem and Ninh Bình Nitrogenous Fertilizer and Chemical.

Despite Vinachem’s 20 member companies recorded profit of VND2.16 trillion (US$ 94 million), but due to VND2.11 trillion (US$92 million) losses incurred from 4 projects above, total revenue of the group is estimated at VND47 billion (US$2 million).

At present, the Prime Minister has approved Vinachem’s restructuring plan in period 2017 – 2020, which should be the basis for the group to continue its effort in reforming its administration and financial management, urged Hai.

From now on, Vinachem will scale down its business lines to producing and trading basic chemicals; exploiting and processing minerals as raw materials for fertilizer and chemical production; producing and trading pesticides and fertilizers containing phosphorus.

After completing the restructuring and divestment plan, it is expected that Vinachem will increase its chartered capital to VND20 trillion (US$878 million).  The chemical group plans to start its equitization process in period 2018 – 2019, for which the government will hold 50% – 65% of its chartered capital. In the first half of 2017, Vinachem recorded revenue of nearly VND21 trillion (US$ 922 million), which is equivalent to last year’s revenue and sustaining loss of VND192.7 billion (US$8.5 million). Meanwhile, in 2016, Vinachem had revenue of approx. VND39 trillion (US$1.7 billion), but still sustained loss of nearly VND1.3 trillion (US$57 million).

The potash salt mine project started construction on September 2015 with Vinachem chosen as investor. It is expected to be completed in 5 years and process 320,000 tonnes of salt per year.

Previously on February 2012, Vinachem signed a 25-year concession agreement with Laos to mine sale across an area of 1,000 hectares.

The project has a total investment of US$522 million, in which US105 million comes from the investor itself and the remaining from Vietnam’s commercial banks, including VDB (US$113 million), BIDV (US$161 million) and VietinBank (US$143 million).

The salt mine project is a key part of a master plan to develop Vietnam’s chemical industry, aiming to ease both Vietnam and Laos’ reliance on imported potash fertilizers.

The Hanoitimes – Hotels in Quang Ninh province were over crowded over the weekend.

The Vietnamese government is considering reopening to foreign tourists as the country and the world enter a new normalcy driven by the Covid-19 pandemic, Prime Minister Nguyen Xuan Phuc said at a meeting with key leaders of Quang Ninh province on May 24.

Prime Minister Nguyen Xuan Phuc addresses at a meeting with key leaders of Quang Ninh province. Photo: VGP

Phuc also asked other localities across the country to strongly promote and prepare all conditions for welcoming domestic travelers in the time ahead.

In the context of the pandemic.

Welcoming back foreign tourists should be prepared with a focus on the safety of tourists, said experts in the field. The Ministry of Culture, Sports and Tourism will submit a schedule for re-starting inbound tourism in the coming time.

In the first four months of 2020, international arrivals to Vietnam plunged 37.8% year-on-year to 3.7 million, according to the General Statistics Office.

In April alone, the number of tourists fell 98.2% from a year earlier and 94.2% against March. The pandemic impacted on the whole tourism industry and its goal of welcoming about 20.5 million international visitors this year is highly unlikely.

At the meeting on socio-economic restoration measures of Quang Ninh province in the post-Covid-19 period, the prime minister praised the encouraging restart of the province’s tourism industry with a focus on domestic travelers. Depending greatly on the tourism industry, the province suffered a great loss due to the pandemic.

PM Phuc said he was impressed witnessing the large turnout of domestic tourists to Quang Ninh province almost immediately after the province, home to the UNESCO-recognized heritage Ha Long Bay, reopened for tourists. On May 23 alone, roughly 11,000 people visited the bay.

A resort in Cam Pha City, Quang Ninh province.

In the first months of the year, the province has managed to maintain production and social order as well as perform the dual goal of fighting the disease and ensuring economic development. This year, the province aims its economy to grow 12%.

Quang Ninh has become a strong and comprehensive growth pole in the Northeast of the country. However, the prime minister asked the provincial authorities should not rest on the laurel and be vigilant, especially as the pandemic is still evolving unpredictably worldwide.

The Hanoitimes – Prior to the pandemic, the city’s tourism had set the target of welcoming over 23 million domestic tourists, a year-on-year increase of 8%.

Hanoi’s tourism authorities will focus on attracting domestic travelers in post-Covid-19 as the country is still cautious about reopening borders to foreign tourists.

Temple of Literature. Photo: Vietnamoimoi

As tourism has become a driving force of the local economy, the city’s tourism authorities would step up efforts to stimulate domestic tourism from now until the end of the year, according to Director of the municipal Department of Tourism Tran Duc Hai.

The city targets to welcome 10-11 million domestic tourists in the remaining months of 2020, higher than the same period of 2019, according to the department. However, it seems to be an ambitious plan.

Tourist attractions in the city have reopened doors to visitors for a few days. However, the flow of tourists is equivalent to just 20% of the pre-pandemic level.

In the first four months of 2020, tourist arrivals to Hanoi plunged 59.2% year-on-year to 3.89 million, causing tourism revenues to fall 53.2% to VND15.83 trillion (US$675.72 million).

During the January – April period, the number of domestic tourists to Hanoi stood at 2.92 million, down 59.5% year-on-year, while the number of foreign tourists to the city fell 58.2% to a mere 964,500. In April alone, tourist arrivals in Hanoi fell 98.4% year-on-year to more than 35,500, leading to a 98.3% year-on-year decrease in tourism revenue to VND143 billion (US$6.1 million).

Source: the Hanoi Department of Tourism. Chart: Nhat Minh

The city’s tourism reactivation will go hand in hand with ensuring safety for visitors in the new normal, Hai said. A number of programs will be rolled out in response to the national program “Vietnamese People Travel in Vietnam” launched by the Ministry of Culture, Sports and Tourism.

The city’s tourism sector will focus on building Hanoi into an attractive destination with the motto “safe – friendly – quality – attractive” as well as provide guidelines on reopening procedures to places of interest so as to comply with the preventive measures against Covid-19.

For the recovery of the local tourism industry, the sector focuses on rebates and demand stimulation while still ensuring quality and diversification of tourism products. The city’s tourism authorities have identified cultural tourism as an advantage. My Duc and Ba Vi districts will be developed into cultural tourism destinations of the city.

Before the pandemic, the city’s tourism industry set plan to welcome nearly 32 million arrivals, up 10.2% compared to 2019, including over 23 million domestic tourists, a year-on-year increase of 8%. Tourism revenue for this year is set at VND120 trillion (US$5.14 billion) in revenue, up 12.3% – 15.5% compared to 2019.

In 2019, the tourism sector grossed over VND103.8 trillion (US$4.48 billion), up 34% compared to 2018.