VN aviation attracts private firms

Vietnam Airlines and Vietjet Air were leading the market by holding more than 40 per cent of market shares each.

The demand is still more than the supply in the market, thus there is a need to attract more investors. Statistics show that the rate of Vietnamese people travelling by air is lower in comparison with other countries in the world and the region. The rate increased from 0.5 per cent in 2012 to 0.8 per cent in 2016.

Experts told Nguoi Lao Dong (The Labourer) Newspaper that of the current seven airlines operating in Viet Nam, only four belonged to the country. Vietnam Airlines and Vietjet Air were leading the market by holding more than 40 per cent of market shares each.

The participation of new airlines could help increase the competitiveness in the market, thus benefiting the people, experts said.

Picking on the trend, private companies have been rushing to establish their own airlines.

On May 31, giant property FLC Group announced the establishment of the Viet Bamboo Airlines Ltd. Co., laying the foundation for the formation of an airline under the name of Bamboo Airways. The airlines with charter capital of VND700 billion (US$31.2 million) would be eligible for operating 10 aircrafts.

According to Dang Tat Thang, Director General of Viet Bamboo Airlines Ltd. Co., FLC was finalising its project on the airline with the aim of launching it by the end of 2018.

Thang said Bamboo Airways would take a different path from its domestic counterparts, elaborating that it would focus on direct services connecting international markets with emerging tourist destinations in Viet Nam, instead of major urban areas where the aviation infrastructure is already overloaded.

He added that priority would be given to localities where FLC has built major tourist complexes, including Quang Ninh and Hai Phong in the north, Thanh Hoa and Quy Nhon (Binh Dinh Province) in the central region, and Nha Trang (Khanh Hoa Province) and Phu Quoc (Kien Giang Province) in the south.

Thang said Bamboo Airways would be a “hybrid” airline, which would blend low-cost traits with those of traditional, or full-service carriers.

Currently, 21 airports are operating across the country, but the two major facilities in Ha Noi (Noi Bai International Airport) and HCM City (Tan Son Nhat International Airport) alone account for 75 per cent of the total passenger output. Meanwhile, many airports in localities with great tourism potential are operating under capacity.

The operation orientation of Viet Bamboo Airways is expected to help better exploit the existing aviation infrastructure while avoiding overloaded airports, the company said.

The establishment of Viet Bamboo Airlines means that the market has three airlines waiting for either licence or adjustment in their licence to expand their operation scale, including Hai Au, Viet Bamboo Airlines and Vietstar Air.

Vo Huy Cuong, Deputy head of the Civil Aviation Authority of Viet Nam (CAAV), said the authority had not received an application from FLC and Hai Au. Vietstar Airlines, with charter capital of VND800 billion, had not been given licences for its operation, as it was waiting for Tan Son Nhat’s expansion, despite having announced the flight plan since the beginning of last year.

Hai Au’s representative told the newspaper that it had implemented the necessary legal procedures to adjust its operation scale from seaplane to a joint airline with international flights. It was expected that Hai Au would officially submit application to the CAAV in the next two months to become operational in 2018.

“Our flying plan does not relate to adjustment of Tan Son Nhat’s expansion, so the time for granting licence will not be extended,” the representative said, adding that their flight network would focus on international flights from Ha Noi and Da Nang to Southeast Asian and Asian countries.

Meanwhile, Vietstar Air still expected to become operational in 2018 by reducing its scale by a half.