Passenger Trains Derailed By Budget Airlines In Vietnam

It is known that the market of Vietnam has been monopolized by its train system thus it is surprising to hear that Vietnam Railways is overpowered by the air transport in the country.

Budget airlines operating in Vietnam were quick to have a market share in the country in the past few years which resulted to fewer passengers that are using train as a means of public transport.

According to Vietnam Railways, the revenue of the company was half in 2015 compared to the revenue in 2014. This is all because of the decline in passenger demand.

The revenue of the state monopoly has been reduced to 2.6 trillion VND or $119 million during the fiscal year of 2015. This is based on figures that were released by the company.

According to a statement by the CEO of Vietnam Railways, their trains have only carried around 4.5 per cent of the total inland passengers that are in the country in 2015. He also added that it has already been a few years since the number of passengers started to decline.

Tung revealed that the budget airlines operating in Vietnam are quickly gaining their market share in the country and it continues to increase over the years. Their recorded annual growth is between 15 to 20 per cent which resulted to the rapid decrease in the number of passengers that are usually traveling by train.

Based in an official statistics, it was shown that the number of passengers that are boarding the domestic flights have risen up to 1.5 times which bring the total to 20.7 million back in 2015 while the recorded number was only 14 million in 2010.

The total number of passengers that travelled by train back in 2015 was approximately 112 million and it is the lowest that has been recorded ever since the boom that happened back in 2011 when around 12.2 million passengers travelled by train in Vietnam. The net profit of the railway operator, on the other hand, remains almost the same as the last year at 39.7 billion VND. Vietnams Railways are also finding ways to cut costs thus it has been brought down to 359 billion in 2015 compared to the 917 billion VND spend in 2014.