Both domestic and foreign tourists will increase in number in 2022 but airlines will take longer to recover to pre-pandemic levels, according to SSI Securities.

It predicts that, in 2022, Vietnam’s domestic passengers are estimated to reach 70 per cent of pre-Covid-19 levels, from 40 per cent in 2021, while international passengers will reach 20 per cent, from 0 per cent in 2021. The number of domestic passengers is expected to hit 52 million, an increase of 75 per cent, while the number of international passengers may reach 8 million.

SSI Securities also expects a full recovery to pre-Covid levels in domestic passengers in 2023 and in international passengers in 2024, in line with the International Air Transport Association (IATA)’s forecasts on global passenger volumes after the pandemic.

However, oversupply in the airline market continues, putting pressure on carriers to reduce ticket prices and limit operational capacity. Load factors and performance estimates during the initial recovery period will be low in 2022, as excess aircraft supply and weak demand will be the main problem until later recovery phases, from 2023 onwards.

For both airports and airlines, international passengers make up a large proportion of profits. Since international flights will be resumed in phases, with test phases in the first half of 2022, a full re-opening is only possible in the second half of the year.

In summary, according to SSI, a rebound in profits is almost certain in 2022, but may not be too positive in the first half, as the re-opening of borders still needs to be observed after testing in the first few months of the year.