It’s boom time

Highly ambitious budget operator Vietjet – it has declared it plans to become the Emirates of Asia with sights set on launching flights to the US – ordered 100 Boeing 737 jets worth $17. 8 billion, along with training and support contracts. It will also buy 215 engines made by CFM, a joint venture between America’s GE Aviation and France’s Safran Aircraft Engines. Vietjet hasn’t yet officially ordered widebody jets but is expected to do so soon, opting for either 787s or A350s.

Then, new startup Bamboo Airways – it took to the air for the first time in December – ordered 10 B787 Dreamliners, also with an eye on transpacific flying which it hopes to inaugurate later this year or early in 2020. State-owned Vietnam Airlines also signed a $100 million maintenance contract with the US Sabre Corporation.

Vietnamese carriers have long had their sights set on flying to the US, particularly the West Coast where there is a large community of people with Vietnamese origins. But doing so has been problematic because the US had not granted Vietnam a Category 1 safety ranking, essentially barring Vietnamese-based airlines to operate into the US. Anyone wanting to fly from Vietnam to the US had to travel to a third country, such as China or Japan, and continue their journey on a non-Vietnamese airline. That clearance was finally approved in February paving the way for services.

Category 1 means air carriers from a country may initiate or continue service to the US and take part in reciprocal codeshare arrangements with US partner airlines.

The breakthrough will almost certainly be a huge boost to Vietnam’s operators, particularly through capturing the vast numbers of “friends and relatives” who travel between the two nations. Data from the Civil Aviation Authority of Vietnam (CAAV) shows the country’s rapidly growing aviation market saw traffic increase 16 per cent on average each year from 2010 to 2017, with passenger numbers jumping from 25 million in 2012 to 62 million last year. These latest developments come after Vietnam’s Deputy Prime Minister Trịnh Đình Dũng recently approved a project to enhance air connectivity by opening new routes and increasing the frequency of existing flights between Vietnam and major tourist destinations around the world. He said more routes will be launched to some of the country’s key tourism spots in the northeastern region, heritage sites in the central area, the south-central and Central Highlands regions, the Mekong Delta and Phú Quốc Island. By 2025, Vietnam is expected to increase flights to all international airports as well as expand its domestic routes, especially inter-regional flights. The project wants to develop the aviation market in line with the Government’s policy of boosting tourism and making it a key pillar of the economy.

It also hopes to attract airlines to open more routes and increase the frequency of flights by enhancing the freedom of the air, optimise operating times and apply preferential pricing policy for airlines operating new international routes.

Vietnam’s aviation market is expected to continue its double-digit growth rate in the future, driven by the development of trade and tourism. With more than 3,000 kilometers of coastline, pristine beaches, dynamic growing cities, mountainous highlands, and diverse cultural and historic sites, Vietnam’s tourism industry continues to rank amongst the fastest-growing tourist destinations in the world, with revenue in 2018 reaching A$37. 5 billion. Since 2010, the number of international tourists has grown threefold from five million to more than 15 million last year. Improvements in service quality and protecting passengers’ rights are also emphasised in the deputy prime Minister’s project.

At present, 68 foreign airlines from 25 countries and territories and four local carriers, including the Qantas groups Jetstar Pacific, are operating in Vietnam.

‘Vietjet has declared it plans to become the Emirates of Asia. ’