With a population of 93.7 million, stable GDP growth rate of 6.5-7% per annum, rapid increase in income per capita, and a sharp rise in the number of foreign travelers (12.9 million), Vietnam is experiencing an aviation boom with an average growth rate of 20% per annum over the last five years.
These are considered ideal conditions for air carriers to develop, including veterans like Vietnam Airlines, Vietjet and Jetstar Pacific, and newcomer Bamboo Airways.
Vietnam's newest commercial carrier Bamboo Airways will officially enter operation in the final quarter of 2018 and plans to open 40 local and international routes.
An analyst commented that Bamboo is following a wise business strategy of targeting tourists and focusing on a niche market with great potential.
The overall tourism development plan by 2020 predicts the average annual 30% growth rate in revenue and 20% growth rate in number of passengers in the upcoming years.
Under the plan, Vietnam strives to attract 10.5 million foreign travelers by 2020. However, in fact, Vietnam received 13 million foreign travelers already in 2017.
BIDV Securities reported that the tourism sector made up VND280 trillion in GDP in 2007 and VND450 trillion in 2017.
As tourism is considered a key economic branch, the policies on infrastructure development, visa and other policies are all designed in a way to help foster the tourism sector.
The development of the tourism sector, in its turn, will facilitate the development of the aviation sector. The International Air Transport Association (IATA) predicted that Vietnam would be the fifth fastest-growing aviation market with 150 million passengers by 2035.
Bamboo’s deputy CEO Nguyen Ngoc Trong said the air carrier would focus on developing the niche market, connecting and developing local economies.
Trong said Bamboo will be a ‘hybrid’ airline which will ‘fill in the gap’ that low-cost air carriers are not interested in.
Though a ‘rookie’, Bamboo is encouraged by the success story of Vietjet which joined the market some years ago when Vietnam Airlines was dominating the market with 70% of market share.
However, Vietjet market share rose to 41.5% in 2016.
Air Asia has also set up a joint venture in Vietnam and is following necessary procedures to take off in 2018.