Vietnam’s Ambitious Airport Upgrade Plans Open Up Investment Opportunities

By the EMIS Insights Editorial Team

The increasing demand for domestic and international air travel as well as air freight transportation positions Vietnam as a potential regional aviation hub in the coming years. To accommodate the projected growth in air traffic, the Vietnamese government has set out ambitious targets to expand aviation infrastructure nationwide. Private sector participation is highly encouraged to achieve the infrastructure goals. 

Vietnam is the world’s fifth fastest-growing aviation market, expected to reach 150 million air transport passengers by 2035, according to the International Air Transport Association (IATA).

The country currently operates 22 civil airports, comprising 12 international and 10 domestic ones. In 2023, the total number of air passengers reached 113.6 million, representing 114.9% of the total designed capacity of these civil airports. The three largest airports were responsible for the bulk of passenger throughput in 2023, with Tan Son Nhat Airport accounting for 35.85%, Noi Bai Airport for 26.35%, and Da Nang Airport for 11.34%. 

Unlike passenger transport, Vietnam’s air cargo sector is relatively small compared to other countries in the region. In 2022, Vietnam’s total cargo volume was only 15.2% of Singapore’s and 22.8% of Thailand’s, the two regional leaders in this sector, ASEANStats data showed.

By 2030, the Vietnamese government aims to upgrade existing airports and construct eight new ones (one international and seven domestic ones), tripling the current design capacity. Looking ahead to 2050, the total number of airports is expected to reach 33, with a capacity five times the current level.

According to the Master Plan, investment in airport infrastructure will accelerate, four times the VND 114tn spent during the years of 2010-2020 for the 2021-2030 period and six times for the 2031-2050 period.

The ambitious airport expansion plans present a substantial opportunity for the private sector, particularly for foreign investors who possess financial capacity, technical expertise, and reputation in the aviation industry.

The country’s regulatory framework is evolving to facilitate private sector participation, particularly through PPP models, while political stability and economic growth provide a favorable backdrop for long-term investments. Moreover, the projected funding gap of VND 145tn opens doors for private capital to play a crucial role in realizing Vietnam’s aviation aspirations.

While obstacles such as long break-even periods, incomplete supporting infrastructure, and complex procedures persist, the overall trajectory remains positive. As Vietnam continues to enhance its global connectivity and position itself as a key player in Southeast Asian aviation, the sector is poised for substantial growth. This growth not only encompasses airport infrastructure but also extends to supporting industries such as airline catering, components manufacturing, and aviation training facilities, offering a diverse range of investment opportunities in the broader aviation ecosystem. With careful navigation of the challenges and strategic leveraging of the opportunities, Vietnam’s airport infrastructure sector is set for a transformative journey in the coming decades.