Vietnam’s Aviation Industry Boom: a Golden Opportunity for Budding Aviators

By: Max Buerger, Head of Alpha Aviation Group (AAG)

The news that Vietjet Air, Vietnam’s first private budget airline, predicts a doubling of passenger numbers in 2016 is welcome reading to Vietnam’s civil aviation industry.

With the price of crude oil expected to remain low, and demand increasing thanks to a growing Vietnamese middle class, Vietnamese airlines will, along with their international counterparts, be looking to capitalize on these trends through fleet expansion. Since the start of 2016, Vietjet has already announced the purchase of twelve new planes in addition to the 9 purchased last year, and expects their fleet to grow to 100 planes within five years.

Yet whilst this boom is a heartening development, it also exposes the urgent need for more pilots within the sector. As airlines acquire larger fleets, enjoy greater profits and welcome more passengers, it is essential that Vietnam’s labor force can meet the demand of its consumers.  

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Already the current shortage of pilots, and specifically Vietnamese pilots, within the Vietnamese commercial aviation sector is evident. Vietnamese airlines are continually having to invest in foreign talent as a means of maintaining operations; of the 800 pilots attached to Vietnam Airlines, 360 are non-Vietnamese nationals, while at Jetstar Pacific Airlines, 95 percent of the company’s total air crew are foreign nationals. The Civil Aviation Administration of Vietnam has also frequently lobbied for the retirement age of pilots to be increased as a means of alleviating this national shortage.

With 40m people in Vietnam under the age of 24, and increasing government investment in science and technology, Vietnam has the potential to meet the demand for more pilots both domestically and across the Asia-Pacific region.  

Neither the government, private sector, or the airlines will be able to solve the pilot shortage alone. While the gravity of this shortage is appreciated within the industry, the current pilot training infrastructure is simply insufficient to produce the capacity currently needed.

Of increased importance therefore will be regional flight training schools. Arguably, private training academies across the region provide the best opportunity to meet the near term shortage in talent seen within the aviation sector.

By outsourcing pilot training, airlines can secure more efficient, cost-effective training programmes, with pilot training schools offering specific skills and expertise in the field. Doing so also enables airlines to focus on the commercial aspects of their businesses. They can do so with the assurance that training schools will provide professional, assured pilots who have undertaken extensive training which can be flexibly offered to suit each airlines’ needs.

Boeing has stated that by 2034, 558,000 additional commercial pilots will be required to service expanding global fleets. Asia’s high likelihood of experiencing rapid expansion in demand means a sizeable proportion of these commercial pilots will be needed in the region. Ensuring ambitious young aviators find their way into high-class pilot training schools will be integral to the continued growth of aviation in Vietnam. 

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The government must play its part too, by ensuring that young Vietnamese are encouraged to pursue and study science and technology subjects. More and more opportunities are set to emerge in this exciting and dynamic sector, and it is crucial that young flight enthusiasts identify this trend and capitalize on it.

This issue is especially pertinent with regards to young women in Vietnam. Of the 130,000 pilots across the globe, a mere 4,000 are estimated to be female. Encouraging young women to join their male counterparts is sure to swell the ranks of cockpits throughout Asia. If accomplished, Vietnam has the chance to become an industry leader in this regard.

This is a pivotal point in the Vietnamese aviation history, and Vietnam’s time is now. The chance is there for a symbiotic relationship to develop between ambitious young aviation enthusiasts and an industry that is projected to rapidly expand in years to come. If young people and airlines are willing to invest in each other, then we could be moving into a golden age of flight for Vietnam.

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In this issue of Vietnam Briefing, we address pressing changes to audit procedures in 2016, and provide guidance on how to ensure that compliance tasks are completed in an efficient and effective manner. We highlight the continued convergence of VAS with IFRS, discuss the emergence of e-filing, and provide step-by-step instructions on audit and compliance procedures for Foreign Owned Enterprises (FOEs) as well as Representative Offices (ROs).

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