FEWER FREIGHTERS FLYING OUT OF VIETNAM

FREIGHTER airlines are cutting capacity from Vietnam as dwindling demand forced rates below pre-Covid levels.

         And the worsening market conditions have prompted one start-up to suspend its application for an airline license.

         According to one of the famous logistics company in Vietnam, said: “Vietnam airfreight rates have dropped to pre-Covid levels, and now most of the export capacity is from passenger flights which are largely leaving empty [of passengers] and so have plenty of room to carry cargo.”

         Country manager for one multinational said key carriers, including China Airlines, Eva Air, Korean Airlines and Qatar Airways, had pulled capacity from the country by between 15 and 20 percent since September.

         Carriers had culled freighter frequency for exports out of both Ho Chi Minh and Hanoi in the hope of maintaining full passenger flight belly loads.

         Demand for exports such as apparel, shoes, and furniture have dropped month by month in the second half of the year, explained the country manager, in response to high stock levels and inflation in the US and Europe.

 “Most traditional manufacturing export orders in Vietnam have been cut by about 30 to 50 percent, and electronics by 10 to 30 percent. Electronic goods are facing low demand as the new Samsung and Apple model smartphones are not selling as well as expected,” they added.

 “There will not be a traditional peak season in Q4, and the downtrend is likely to extend into Q1 2023.”

          Meanwhile, IPP Air Cargo has put its plans to become Vietnam’s first all-cargo airline on hold, blaming deteriorating market conditions in international freight markets.

         The airline, which had received its first freighter and planned to launch in September, reportedly said it would end the process of obtaining an airline licence because “air cargo fares have dropped to affordable levels, for both FDI and other firms engaging in international trade”.

          IPP said it would resume its plans “when the market stabilises”.