Doing Business

Digital Shift in Vietnam’s Aviation Industry

Trường Lăng

October 18, 2023

Doing Business

Digital Shift in Vietnam’s Aviation Industry

Trường Lăng

October 18, 2023

The aviation industry in Vietnam is standing at a crucial crossroads, where digital transformation isn’t just an option but an imperative for achieving sustained growth and competitiveness. This article delves into the digital landscape of the aviation industry, shedding light on its current state, the plethora of challenges and opportunities it presents, the legal framework, and incentives that fuel its evolution, all while emphasizing partnerships and strategic investments. As we embark on this journey through these sections, we aim to provide readers with a comprehensive understanding of how digital transformation is reshaping the Vietnam’s aviation industry.

The Digital Landscape in Vietnam’s Aviation

The digital landscape within the aviation industry in Vietnam is rapidly evolving, driven by a wave of technological innovation and the need for enhanced efficiency and customer experiences. Airlines, airports, and associated services are increasingly embracing digitalization to stay competitive in a globalized market.

The Civil Aviation Authority of Vietnam (CAAV) has recently unveiled an ambitious plan to pilot electronic identification accounts at level 2 (e-ID) with integrated passenger biometric authentication in 22 airports across the nation. This groundbreaking initiative, scheduled to run from June 1 to August 1, marks a significant step towards advancing digital transformation within the Vietnamese aviation sector. As affirmed by Mr. Dinh Viet Son, Deputy Director of CAAV, the initial stages of implementing biometric authentication and utilizing e-ID for flight check-in have displayed promising results. The potential for further development is undeniable, given that more than 37 million e-ID accounts have been issued, with nearly 17 million of them actively activated, according to statistics from the Ministry of Public Security.

Vietnamese airlines are also making substantial strides in their investments in digital transformation. They are diligently working to create service systems accessible through various devices, such as computers, phones, tablets, and airport check-in kiosks. This synchronous approach is geared toward enhancing passenger convenience and satisfaction. Airlines are keen on offering passengers a broader array of choices for accompanying services during the online ticket booking process. These services encompass additional checked baggage, meals, and in-flight entertainment options.

A noteworthy example of this digital progression occurred on August 1, 2023, when Da Nang International Airport joined forces with Korean Air to introduce a bilingual automatic check-in system (self check-in kiosk) for international flight passengers. Ten self-check-in kiosks were strategically placed within the international terminal, allowing passengers to efficiently complete check-in procedures themselves. A dedicated passenger assistant team was also deployed to assist travelers with the process. The touch screen interface provides clear and comprehensible instructions, facilitating a seamless experience for passengers.

The Digital Landscape in Vietnams Aviation Industry
Self-check-in kiosk at Da Nang International Airport. Source: congly.vn

Further elevating the passenger journey, five Vietnamese international airports – Da Nang, Noi Bai, Cam Ranh, Tan Son Nhat, and Phu Quoc – have recently inaugurated their automatic entry system, known as Autogate, starting from the beginning of August 2023. The Autogate area boasts a two-layer approach to expedite passenger clearance. In the first layer, passengers scan their passports and boarding passes. Upon successful scanning, the system proceeds with facial recognition and fingerprint scanning, obviating the need for customs officers to physically stamp passengers’ passports. This cutting-edge technology streamlines the immigration process, resulting in a more efficient and secure entry procedure for travelers.

Challenges and Opportunities on the Digital Frontier

Challenges

As the Vietnamese aviation industry embarks on its digital transformation journey, it encounters several challenges that demand careful navigation. Firstly, there’s the lack of expertise in handling advanced digital technologies among aviation professionals. Many may not be well-versed in the intricacies of IoT, AI, and data analytics, necessitating extensive training and upskilling initiatives to ensure a smooth transition.

Secondly, the continuous evolution of customer needs presents a formidable challenge. Passengers’ expectations are ever-changing, demanding more personalized and seamless travel experiences. Meeting these evolving demands requires a dynamic approach to digitalization, with the ability to adapt swiftly to shifting customer preferences.

Internal resistance to change is another critical hurdle. Within aviation organizations, there may be resistance to depart from traditional practices and embrace innovative digital solutions. Overcoming this resistance necessitates effective change management strategies and the cultivation of a culture of innovation.

Additionally, budget constraints can impede progress in digital transformation. Investing in the necessary digital infrastructure, technologies, and cybersecurity measures demands substantial financial resources. Balancing these investments with other operational expenses can be a complex financial challenge for aviation stakeholders.

Opportunities

Amidst these challenges, the digital frontier in Vietnamese aviation also presents a plethora of opportunities for growth and advancement. Collaborative partnerships between airlines, airports, government entities, and technology providers can significantly mitigate expertise gaps and budget constraints. These alliances enable the pooling of resources and expertise to drive digital initiatives forward, fostering a collective spirit of innovation.

Furthermore, the digital transformation journey offers the potential to enhance passenger experiences, streamline operations, and create new revenue streams. Airlines and airports can seize the opportunity to provide more personalized and efficient services. Passengers can enjoy seamless and tailored travel experiences, from booking to disembarkation, through digital innovations. Moreover, operational efficiencies driven by digital solutions can lead to cost savings and improved revenue generation.

The adoption of emerging technologies like IoT, AI, and data analytics opens doors to data-driven insights, enabling aviation stakeholders to make informed decisions. Predictive analytics can optimize flight schedules, while AI-driven chatbots can enhance customer service. These advancements not only elevate passenger satisfaction but also contribute to the industry’s overall competitiveness.

Challenges and Opportunities on the Digital Frontier of the Aviation Industry
The adoption of emerging technologies opens doors to data-driven insights, enabling aviation stakeholders to make informed decisions. Source: Internet

Legal Framework and Incentives for Digital Evolution

In the Vietnamese aviation sector, digital transformation has taken center stage as the top priority. This commitment to modernization is reinforced by Decision No. 2269/QĐ-BGTVT, the Ministry of Transport’s digital transformation program. The decision outlines a comprehensive roadmap aimed at bolstering digital technology infrastructure to support flight management and enhance operational capabilities. A key objective is to fortify air traffic control systems, ensuring the utmost level of flight safety.

This regulatory initiative underpins the significance of digital transformation within the industry, setting a clear direction for the adoption of advanced technologies. It signals the government’s commitment to creating an environment conducive to digital innovation, providing the aviation sector with the necessary regulatory framework to thrive.

Moreover, these regulatory changes are accompanied by a suite of incentives designed to incentivize airlines and aviation-related entities to embrace digital technologies. These incentives encompass a spectrum of benefits, ranging from financial support to tax incentives, all intended to facilitate and accelerate the digital evolution of the aviation sector.

Legal Framework and Incentives for Digital Evolution in the Aviation Industry
The government is committed to providing the aviation sector with the necessary regulatory framework to thrive. Source: Vietjet Air

Final Thoughts

The aviation industry in Vietnam is in the midst of a profound digital transformation. As we’ve explored, embracing this evolution is not just a choice but a necessity for investment in competitiveness and ensuring safe, efficient operations. From the burgeoning digital landscape to the challenges that lie ahead, the path to success in this digital age is clear.

At Viettonkin, we recognize the critical role of partnerships and innovation in this journey. As a strategic ally, we are dedicated to supporting stakeholders in the aviation industry as they navigate the complexities of digital transformation. Whether it’s optimizing operations, enhancing passenger experiences, or complying with evolving regulations, our expertise is your advantage.

Our collaborative endeavor with IBS Software –  a leading SaaS solutions provider to the travel industry globally has brought to you the latest whitepaper “Unleashing Vietnam’s Potential: Accelerating Growth in the Aviation Industry through Digital Transformation”, detailing the current state, challenges, and opportunities of digital transformation in this rapidly expanding market.

Access the full version of this whitepaper at: https://www2.ibsplc.com/whitepaper-unleashing-vietnams-potential-vn.html

Reach out to us. Together, we can harness the power of technology to elevate your operations, foster growth, and secure your place at the forefront of the evolving aviation landscape.

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