Prolonged Middle East conflict raises revenue concerns for Vietnam’s aviation sector

The Civil Aviation Authority of Vietnam said that as of Saturday, several flight information regions (FIRs) across the Middle East had remained closed or operating under restrictions because of complicated security conditions.

Although Vietnamese airlines do not currently operate direct routes to the Middle East, flights from Vietnam to Europe operated by national flag carrier Vietnam Airlines have been forced to avoid the airspace over Iran, Iraq, and nearby areas.

Instead, aircraft are being rerouted along northern corridors through Central Asia and China or southern routes passing through South Asia and the Arabian Peninsula.

According to the authority, these detours increase flight time by some 10 to 15 minutes per leg and add about US$2,000 in operating costs per flight.

If the conflict persists, airlines could also face higher war-risk insurance premiums, which may increase by 10-15 percent for aircraft operating long-haul routes.

Currently, three Middle Eastern carriers, including Qatar Airways, Emirates, and Etihad Airways, operate six routes linking Doha, Dubai, and Abu Dhabi with Hanoi, Ho Chi Minh City, and Da Nang City.

These services run at an average frequency of about 12 flights per day.

In January, the three airlines carried around 141,000 passengers and transported roughly 11,000 metric tons of cargo to and from Vietnam.

However, since February 28, numerous flights have been canceled owing to the conflict, affecting tens of thousands of travelers.

Due to the impact of the conflict, Vietnam Air Traffic Management Corporation could lose nearly $250,000 per week in revenue, equivalent to roughly $1 million per month.

Meanwhile, the Airports Corporation of Vietnam estimated potential losses of around $10.9 million per month from aviation service fees.

The authority said it would coordinate with the Airports Corporation of Vietnam to consider reducing aircraft parking service charges for affected airlines, while studying the possibility of introducing fuel surcharges if global oil prices continue to surge.

Airlines have also announced support measures for passengers affected by the disruptions.

Emirates is allowing ticket changes for journeys departing on or before March 20, or refunds for bookings scheduled on or before March 10.

Etihad Airways is offering free rebooking until March 31 and refunds for impacted flights.

Also, Qatar Airways is permitting passengers scheduled to fly between February 28 and March 10 to change flight dates within 14 days or request refunds for unused ticket segments.

Airlines are advising passengers traveling to Europe to prioritize direct flights where possible or consider transit routes through East and Southeast Asian hubs such as Taipei, Singapore, Hong Kong, and Bangkok to minimize the risk of further disruptions.

The authority also warned that disruptions in the Middle East could impact supply chains.

The region serves as a transit hub for some 25-30 percent of electronic components and high-tech goods shipped from Europe to Vietnam.

If the disruption continues, some manufacturing facilities in Bac Ninh and Thai Nguyen Province, northern Vietnam may face localized shortages of components.

Escalating military tensions between the United States, Israel, and Iran in the Middle East since February 27 have disrupted air routes, while several flights between Vietnam and the Middle East were canceled on Thursday.

The Middle East conflict escalated after the U.S. and Israel carried out air strikes on multiple targets in Iran.

Tehran later responded with attacks on Israeli territory and missile launches targeting dozens of U.S. bases in Gulf countries, including the United Arab Emirates, Kuwait, Saudi Arabia, Qatar, Bahrain, and Oman, resulting in casualties and property damage.

Tehran declared the Strait of Hormuz, through which around a fifth of global oil consumption passes, closed and warned it would attack ships attempting to pass through it.