Vietnam’s Aviation Market Set for Takeoff: Growth Drivers, Key Players, and Future Outlook to 2030

Vietnam’s aviation sector is entering a new phase of expansion, fueled by surging international demand, infrastructure developments like Long Thanh Airport, and digital transformation across airlines. Positioned as Southeast Asia’s fastest-growing market, Vietnam is strengthening its role as a regional air travel hub despite ongoing challenges in capacity and workforce supply.

Vietnam’s aviation market is experiencing rapid growth, nearing pre-pandemic passenger levels and leading Southeast Asia’s recovery. With strong demand for international travel, major infrastructure upgrades like Long Thanh Airport, and digital innovations, Vietnam is strengthening its role as a regional aviation hub despite challenges such as airport congestion and workforce shortages.

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Vietnam’s aviation industry is rapidly regaining altitude, with passenger numbers nearing pre-pandemic levels and signaling a robust recovery trajectory. In the first half of 2024, Vietnamese airlines transported over 54 million passengers, underscoring the sector’s strong rebound from the pandemic-induced downturn. Key domestic routes, such as Hanoi–Ho Chi Minh City, have emerged as some of the busiest in Southeast Asia, reflecting resilient domestic demand and growing connectivity.

Beyond the numbers, aviation has become a critical pillar of Vietnam’s economic development. The sector not only supports the country’s booming tourism industry but also strengthens trade links and international integration efforts. Positioned strategically in Southeast Asia, Vietnam’s expanding aviation footprint enhances its role as a vital hub for regional and global travel, setting the stage for sustained growth in the years ahead.

Market overview

Passenger trends

In 2024, Vietnam’s aviation sector handled 109 million passengers, demonstrating a strong rebound and aligning closely with peak pre-pandemic traffic volumes. While the total figure marked only a slight dip of 3 percent compared to 2023, the underlying dynamics revealed a notable shift: international passenger traffic surged by 26 percent, while domestic traffic declined by 15 percent. This divergence underscores changing consumer behavior, with travelers increasingly favoring international destinations, including spots in Vietnam, amid growing disposable incomes and broader reopening trends across Asia.

Sector drivers

Several structural drivers continue to underpin Vietnam’s aviation momentum. The country’s strong economic fundamentals—including rising GDP and steady industrial production growth—have bolstered demand for both business and leisure travel. At the same time, a booming tourism sector, supported by favorable visa policies and expanded air connectivity, has further fueled international arrivals, particularly from Northeast Asia markets such as South Korea, Mainland China, Taiwan, and Japan.

Vietnam’s strategic location in Southeast Asia enhances its appeal as a regional air travel hub. Its proximity to key markets, ongoing infrastructure upgrades, and proactive aviation policies position Vietnam to capture a greater share of both intra-Asia and long-haul traffic. As the sector continues to evolve, these competitive advantages are expected to drive sustainable growth and strengthen Vietnam’s standing as a key player in the regional aviation market.

Key players and competitive dynamics

Vietnam’s aviation market remains highly competitive, dominated by two major players: Vietnam Airlines and Vietjet Air, which together account for more than 84 percent of the domestic market. In the first five months of 2024, Vietnam Airlines held a 42.2 percent market share, while Vietjet Air slightly edged ahead at 42.8 percent, solidifying their leadership positions.

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Beyond the two market leaders, other carriers are working to carve out niches. Bamboo Airways, after facing significant challenges including leadership changes and corporate restructuring, is now showing signs of recovery, resuming domestic flights to destinations such as Phu Quoc and expanding international operations to Taiwan. Pacific Airlines, a subsidiary of Vietnam Airlines, and VASCO continue to maintain stable operations in regional and niche markets, while Vietravel Airlines is undergoing a strategic transformation following new investments.

A notable recent development is the entry of T&T Group as a strategic investor in Vietravel Airlines. Backed by T&T’s broader logistics and infrastructure network, Vietravel Airlines is undergoing leadership transition and expansion plans aimed at strengthening its competitiveness in both passenger and cargo segments. Separately, plans are underway for a new full-service carrier, expected to launch in 2026 with an initial fleet of six aircraft, signaling further intensification of competition.

As airlines expand fleets and recalibrate business strategies, Vietnam’s aviation market is undergoing a structural reshaping. Competitive pressures are likely to drive innovation, service improvements, and market segmentation across domestic and international operations.

Domestic and international route expansion

Hanoi-HCMC route dominates Vietnam’s domestic travel demand

Vietnam’s aviation recovery is fueled by robust growth across domestic and international routes. On the domestic front, travel demand remains strong, anchored by key high-traffic corridors. The Hanoi–Ho Chi Minh City route continues to be the busiest in Southeast Asia, with 949,249 seats available in August 2024 alone. This route not only dominates regional traffic but also commands premium pricing, with ticket prices reaching up to US$140 during peak periods. To capture seasonal surges, major airlines have added new aircraft to their fleets, enhancing their capacity and operational flexibility.

Dynamic rebound in international routes

Internationally, the sector is witnessing an even more dynamic rebound. In the first half of 2024, international passenger traffic surged by 28 percent, driven by growing demand across key outbound and inbound markets. South Korea, China, India, Australia, and emerging destinations in Central Asia have become important focal points for route development and traffic growth.

Vietnamese airlines are actively expanding their international footprints. Vietnam Airlines has resumed and launched new routes, including flights to Munich and Phnom Penh, while Vietjet Air introduced new connections such as Hanoi–Kuala Lumpur. Bamboo Airways, undergoing a period of recovery, has also relaunched services to Taipei and Kaohsiung. These network expansions reflect a strategic pivot toward broadening Vietnam’s international presence and responding to rising travel demand.

Infrastructure and technology developments

Vietnam’s aviation sector is experiencing growth supported by significant infrastructure upgrades and a range of digital initiatives aimed at enhancing efficiency and service quality. Two major projects are on track to notably increase the country’s airport capacity. The construction of Terminal 3 at Tan Son Nhat International Airport in Ho Chi Minh City is set to reduce congestion at the nation’s busiest airport. Meanwhile, the much-anticipated Long Thanh International Airport is slated to open its first phase in 2026, positioning itself as a key regional hub for both passenger and cargo traffic.

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At the same time, Vietnam is accelerating the adoption of advanced technologies to streamline airport operations and enhance the passenger experience. The Airports Corporation of Vietnam (ACV) plans to introduce the ACV ID system, leveraging biometric verification to automate security screening and identity checks. Airlines are also embracing digitalization. Vietnam Airlines has launched VNA AI, powered by GPT-4 via Azure OpenAI, to enhance regulatory compliance and improve workflow efficiency. Simultaneously, Vietjet Air has adopted SkyBreathe, an AI-powered solution for optimizing fuel consumption and reducing carbon emissions.

These developments are aligned with broader industry forecasts. According to Boeing’s 2025 Commercial Market Outlook, Vietnam is expected to be Southeast Asia’s fastest-growing aviation market, with annual passenger traffic projected to rise by 8.1 percent between 2025 and 2030. Supported by expanding infrastructure, rising air travel demand, and continued digital innovation, Vietnam’s aviation sector is well-positioned for sustained, high-paced growth.

Favorable conditions for new opportunities

The country is benefiting from a rising middle class, a surge in inbound and outbound tourism, and relaxed visa policies that are making travel to Vietnam more accessible. These trends are expanding the passenger base and driving leisure and business travel demand. At the same time, the prospect of new market entrants, including a proposed full-service carrier set to launch in 2026, is expected to enhance competition and global connectivity further.

On April 15, 2025, Vietnam’s government issued a decree that modifies the regulations regarding the types of aircraft allowed for import into Vietnam. According to this decree, aircraft imported into Vietnam must have a certificate granted or recognized by one of the following organizations:

• The US Federal Aviation Administration (FAA);
• The European Union Aviation Safety Agency (EASA);
• The National Civil Aviation Agency of Brazil;
• The Transport Canada Civil Aviation (TCCA) Directorate;
• The Federal Agency for Air Transport of the Russian Federation;
• The United Kingdom Civil Aviation Authority;
• The Civil Aviation Administration of China (CAAC); or
• The Vietnamese Ministry of Construction.

Previously, aircraft could only be imported into Vietnam if they had certifications from the FAA, EASA, or the Civil Aviation Authority of Vietnam. Consequently, this new policy will permit the import of a broader range of aircraft types, including those certified by authorities in Brazil, Canada, Russia, the United Kingdom, and China.

Also read: Investment Opportunities in Vietnam’s Aviation Sector

Future outlook

As Vietnam’s aviation industry accelerates its post-pandemic recovery, a range of opportunities and structural challenges will shape its long-term trajectory. However, these growth drivers are accompanied by persistent challenges.

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Vietnam’s major airports, including Tan Son Nhat and Noi Bai, continue to face capacity constraints, resulting in congestion and flight delays. The industry is also grappling with workforce shortages, particularly in skilled roles such as pilots, maintenance technicians, and digital operations specialists. In addition, airlines face financial pressures as they work to modernize fleets, invest in cybersecurity, and implement advanced technologies—all while navigating thin operating margins.

Despite these obstacles, the outlook for Vietnam’s aviation sector remains highly optimistic. Backed by strong economic fundamentals, infrastructure expansion, and supportive government policies, the country is on track to become a major aviation hub in Southeast Asia by 2030. With sustained investment and strategic execution, Vietnam’s skies look increasingly open for long-term growth.

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