|Budget carrier Bamboo Airways
The approval, signed by Deputy Prime Minister Trinh Dinh Dung, allows the private airline to operate narrow-body jets like the Airbus A320 and wide-body jets like the Airbus A350 or Boeing B787.
However, the government did not approve the airline’s proposal to increase its charter capital capital to VND8.3 trillion ($358 million). The carrier’s current capital is VND1.3 trillion ($56 million).
It must mobilize capital according to actual business results and the speed of fleet expansion, the government said.
The Ministry of Finance had said earlier that as of the end of April, three months after its first flight, Bamboo Airways was recording a loss of VND329 billion ($14.2 million).
Chairman Trinh Van Quyet said at a shareholders’ meeting in June that the loss was because the airline had to pay salaries for a team big enough to operate 30 aircraft, while the airline only has 10.
Bamboo Airways has over 300 pilots, of whom 80 percent are foreigners. As only 11-14 pilots are needed to operate 10 aircraft, it has 200 pilots in excess, ready to work when new aircraft are added.
Quyet said that by operating 30 aircraft, the airline could turn a profit by next year’s first quarter.
Bamboo Airways is set to fly its 10,000th flight this month after eight months of operation. It operates 25 domestic and international routes. Its international routes cover Japan, South Korea and China.
It is planning long-distance flights to Germany, Czech, the U.K. and a direct flight to the U.S.
Vietnam targets to have the aviation market grow by 16 percent each year between 2015-2020, and 8 percent a year in 2020-2030.
This means that the country will have 117 million air passengers by 2023, 85 percent of whom will be catered for by Vietnamese carriers, which would need 340 aircraft in total by then.
Last year, local airlines served almost 50 million passengers, up 10.1 percent from 2017.