Multi-billion dollar affairs shake up aviation industry

Vietnam’s aviation industry has scored new grade promotions recently with high revenue growth rate and rapid development of modern fleets.

According to the head of the Civil Aviation Authority of Vietnam (CAAV) Lai Xuan Thanh, in the first six months of the year, Vietnam was included in the regional top 3 and the world’s top 7 in air transport growth rate.
The total number of passengers going through Vietnam’s airports in the first six months of 2016 reached 38 million. The air transport market witnessed record high growth rate of 30% in the period.
Vietnam Airlines has become a rival in the region, having become a 4-star airline in accordance with Skytrax standards.

multi-billion dollar affairs shake up aviation industry hinh 0

With airlines’ expansion, it is expected that the domestic fleets would have 244 aircrafts by 2020. Vietnam Airlines has 114 aircraft, and Jetstar 30 and Vietjet Air 100. This does not include aircraft of the air carriers likely to be established in the time to come.

Jetstar Pacific, after a lot of ups and downs, has become stable and begun its development process. Meanwhile, Vietjet Air is well known in Vietnam and in the world though it is relatively new. 

Three domestic and 55 air carriers have developed 99 international air routes to Vietnam. Foreign airlines hold 57.6% of the market share, and domestic 43.3%.

Shocking investment deals

Vietnam Airlines has planned major reform for its fleet, deciding to change all large-body airplanes with the new-generation Boeing 787-9s and Airbus 350-900 XWB.

Asked about the new business goals, Duong Tri Thanh, CEO of Vietnam Airlines, said the air carrier strives to be recognized as a 5-star airline in the near future, while considering launching direct air routes to North America by 2018.

Vietjet Air, the young air carrier which began its operation in 2013, has surprised the public with valuable aircraft purchase contracts worth tens of billions of dollars.

Most recently, Vietjet Air signed a contract on the procurement of 20 A321s worth US$2.39 billion with Airbus during the French President Francois Hollande official visit to Vietnam.

Ready for competition

Vanilla Air, the Japanese low-cost carrier, provided the first flight from Ho Chi Minh City to Tokyo with transit in Taipei on September 15.

Mio Yamamuro, deputy CEO of Vanilla Air, when asked about rivals in Vietnam, named Vietjet Air, which provides many flights between Vietnam and Taipei, the same as Vanilla Air.

However, experts believe that with a powerful fleet and its business expansion plan, there is no need for Vietjet Air to be afraid of Vanilla Air, even though it has committed to provide services with ‘Japanese quality’.

Vietnamnet

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