Vietjet spreads wings in “open skies”

In just three years, Vietjet has consolidated its position as a force to be reckoned with in the global aviation sector

On-going expansion

On September 5, to celebrate the re-opening of the Pleiku airport in the Central Highlands province of Gia Lai, Vietjet has revealed its latest domestic routes, which connect the Central Highlands city with Hanoi and Ho Chi Minh City. Both routes will debut on October 1, 2015, raising the number of domestic and international Vietjet routes to 35.

In addition to increasing the number of routes, the airline is rapidly expanding its fleet. In June, at the Paris Air Show 2015, Vietjet signed a deal with aircraft manufacturer Airbus to purchase six more A321 jets worth $682 million. These aircraft will be delivered in 2017.

The purchase of these single-aisle A321s is an addition to a deal that Vietjet made last year with the European aircraft manufacturer for the purchase and lease of 100 aircraft. In early 2015, a total of six A320 and A321 planes from that initial order were delivered. As per the contract, Vietjet will continue to receive six to twelve aircraft every year until the order is complete. According to the airline’s website, this order for an additional six A321s from Airbus further underscores Vietjet’s strong growth, which has exceeded the expectations of the previous contract.

Vietjet’s ambitious expansion is not limited to its dealings with Airbus. Last month, Vietjet signed a Memorandum of Collaboration (MoC) with Boeing as the basis for the two to nurture their partnership. The airline is considering buying Boeing aircraft and equipment as well as other related services, and co-operate with Boeing in other fields such as fleet development planning, training and flight management, public relations, brand building, and finance.

In July, Vietjet signed a memorandum of understanding (MoU) with US multinational Honeywell Aerospace to co-operate in the design and production of $56 million worth of data management equipment on aircraft. The MoU calls for both parties to explore more opportunities for Vietjet to select and install Honeywell’s APU and avionics suite for its new aircraft to be delivered from now until 2017.

All these activities are part of Vietjet’s plan of continuous growth and modernisation in order to achieve its goal of becoming a favourite airline not only in Vietnam but also around the globe.

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The private carrier plans to continue expanding its fleet for the forseeable future

Three years of achievements

More than three years ago when carrying out its first commercial flights, the founder of Vietjet said they wanted “everybody to fly.” The airline wanted to bring about a revolution in transport, bringing a form of transport that is modern and efficient to more Vietnamese and contribute to the development of Vietnam’s air transport industry to match the world’s standards.

Supported by the government’s policy to privatise air transport, over the past three years, Vietjet has continued along a steady track of growth. To date, the airline has transported 13 million passengers. It boasts a fleet of 26 aircraft, including A320s and A321s, and operates 180 flights each day, domestically and to international destinations such as Thailand, Singapore, South Korea, Taiwan, China, and Myanmar.

According to statistics from the Civil Aviation Administration of Vietnam, Vietjet contributed 70 per cent of the growth in Vietnam’s air transport in 2014. The private carrier not only made air travel affordable for Vietnamese population, but also increased competition in the market, which has, in turn, created a domino effect of positive changes in other airlines’ operations and quality of service.

At present, there are more than fifty flights a day between Hanoi and Ho Chi Minh City, departing every 15-20 minutes. Between Ho Chi Minh City and Danang there are 30 flights a day. Local airports have become busier as a direct result of Vietjet’s domestic and international flights, and flyers have come to expect better and better service during their travel.

In recent times, Vietnam’s air transport sector has changed for the better through its legal framework and policies, as well as through the upgrade of infrastructure and the improvement of management.

Having secured a loyal customer base, Vietjet has also been praised by the Vietnamese government for strengthening Vietnam’s relationship with the rest of the world through travel, as well as bolstering the nation's air transport industry. At the airline’s recent meeting to review the first six months of the year, during which Vietjet reported a revenue of VND5.7 trillion ($266 million), a 90 per cent fill rate, and transporting 4 million passengers on 25,788 safe flights with an on-time rate of 83 per cent, Nguyen Nhat, Deputy Minister of Transport, expressed his appreciation of the company’s efforts.

“I can see the development of Vietjet and the love from its growing customer base. The journey will continue to be difficult. I hope the airline will continue to present to the world an image of a prestigious Vietnamese brand and of Vietnam as a dynamic country,” he said.

…and counting

In January Vietjet opened its 2015 plan with the motto “Welcome Open Skies,” which shows the company’s readiness to welcome the opportunities and challenges presented by the establishment of the ASEAN Economic Community and the subsequent open skies policy that member countries are scheduled to adopt.

Countries will have to open their skies for regional airlines, meaning that competition will be much more robust. According to Luu Duc Khanh, managing director of Vietjet, the airline has been implementing technological, financial, and manpower preparations to capitalise on this process.

Aside from keeping a close eye on the bottom line, the airline is also keen to ensure its operational safety, and thoroughly trains its human resources to ensure the quality of its services.

Last month, the airline received the IATA Operational Safety Audit (IOSA) certificate from the International Air Transportation Association (IATA) for meeting international operational standards. Vietjet became the second Vietnamese airline after the flagship carrier Vietnam Airlines to receive the certification.

“The IOSA certification shows that safety assurance is Vietjet’s top priority. With our commitment to complying with world-class safety and security standards, we expect to bring our clients safe, comfortable, joyful, and friendly flights,” Vietjet’s managing director Luu Duc Khanh said.

In January, the company unveiled its revamped training facility in Ho Chi Minh City. In this extensive and modern facility, the company can meet the increasing demand for teaching new students. The centre originally opened in August 2012 and, to date, has had nearly 5,000 trainees enrolled in more than 400 courses, and taught by 85 professional teachers.

In addition to providing air transport services and promoting tourism, Vietjet aims to mobilise capital from international sources to invest in the production of aircraft parts and space travel equipment in Vietnamese industrial parks, as well as attracting foreign investment in aircraft technical maintenance and training facilities.

“As Vietnam’s air transport industry opens up to competition, there will be challenges, but Vietjet believes that with the Vietnamese government’s commitment to modernising and improving the sector, and with people’s demand, we’re going to continue receiving support to develop both in scale and quality,” said Khanh.

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