Northwest Airlines will be the second US airline to fly to Vietnam after being granted a license to operate a service from Ho Chi Minh City (SGN) to San Francisco and Los Angeles by the Civil Aviation Administration of Vietnam (CAAV).
By any measure, 2007 was a good year for air cargo in Vietnam. Overall cargo export volumes grew some 18 percent to 130,000 tons, representing an increase of 20,000 tons over 2006. This growth has been of major benefit to the country’s largest GSSA, ITL Aviation Services, that has produced impressive growth of 21 percent in 2007.
Vietnam’s cargo explosion pays big dividends for ITL
28 March 2008 - Air Cargo News
By any measure, 2007 was a good year for air cargo in Vietnam. Overall cargo export volumes grew some 18 percent to 130,000 tons, representing an increase of 20,000 tons over 2006. This growth has been of major benefit to the country’s largest GSSA, ITL Aviation Services, that has produced impressive growth of 21 percent in 2007.
Vietnam’s ideal geographical position, bordering China, combined with a surge of foreign investment, has led to eight years of impressive export driven momentum for the country’s economy.
In 1999 Vietnam’s cargo market was tiny and business was scarce, but the owners of ITL spotted the potential of the market and created the GSSA to become a specialist in the market. “When we first set up store in Ho Chi Minh City in 1999, there were just a dozen foreign airlines flying on a regular basis” said Ben Anh, ITL’s managing director. “But now everything has changed. There are now over 43 airlines servicing the two major international airports, Tan Son Nhat in the south and Noi Bai in the north. Almost all the major freighter operators in the Asian region now operate here”.
Last year saw Tan Son Nhat attract three new dedicated freighter operators in the shape of Cargoitalia, Cargolux and Japan Airlines, adding to freighter services offered by China Airlines, EVA Air, Asiana Airlines and Korean Air. “ We are now on top of the top tier of Vietnam’s cargo GSA market, which has shown a substantial growth of 21 percent in 2007”, said Anh.
ITL’s success has outpaced even the impressive overall growth in the Vietnam market. In 2007 it handled almost 14,000 tonnes, accounting for 10.7 percent of Vietnam’s total market share.
“We are now the GSA for a total of eight airlines, including Thai Airways, Royal Brunei Airlines, Martinair and AirBridge Cargo. We hope to be able to gain more airlines in the near future”.
ITL is now responsible for selling 61 flights per week at both airports and Anh is convinced this figure could now rise rapidly, given the prospects for the market. Vietnam government forecasts, prediet export volume growth of 30 percent in 2008, driven by EU and US demand for fashion garments and footwear. Although understandably a good proportion of these exports will move by ocean freight, airfreight exports from Saigon are still predicted to grow by 12-15 percent and exports from Hanoi by 20-25 percent. Although gaments and footwear make up some 65 percent of all exports, high-end electronic products, especially from Hanoi, are beginning to make a real impact.
From its modest beginnings, ITL has expanded not only in Vietnam, but is now looking to become a major regional player in the GSA market. “We aim to be the top player in the Indochina market with offices in Cambodia, Laos and Thailand. We are also much more than a GSA. We have proven to customers that we can be their one-stop integrated logistics and transportation service provider for modern complex supply chain demands”.
However, despite the upbeat figures, Vietnam’s air cargo market still faces major challenges. The seasonal nature of the market creates difficulties in retaining freghter operations year round. “In the low season, there is significant overcapacity at Tan Son Nhat, which leads to lower yields compared with neighbouring countries”, said Anh. The high season also has its own difficulties due to the country’s poor infrastructure, leading to pressure on road feeder services and warehousing. “The key to our success has been to build our services around low-cost options”, concluded Anh.
© Copyright 2008 Fptdata. All rights reserved