VN aviation attracts private firms

June 05, 2017 - 10:06

The domestic aviation market is expected to see changes in 2018 with the participation of new and big private investors, experts said.

HÀ NỘI — The domestic aviation market is expected to see changes in 2018 with the participation of new and big private investors, experts said.

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 Người Lao Động (The Labourer) Newspaper that of the current seven airlines operating in Việt 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 VNĐ700 billion (US$31.2 million) would be eligible for operating 10 aircrafts.

According to Đặng Tất Thắng, Director General of Việt Bamboo Airlines Ltd. Co., FLC was finalising its project on the airline with the aim of launching it by the end of 2018.

Thắng 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 Việt 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 Quảng Ninh and Hải Phòng in the north, Thanh Hóa and Quy Nhơn (Bình Định Province) in the central region, and Nha Trang (Khánh Hòa Province) and Phú Quốc (Kiên Giang Province) in the south.

Thắng 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 Hà Nội (Nội Bài International Airport) and HCM City (Tân Sơn Nhất 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 Việt Bamboo Airways is expected to help better exploit the existing aviation infrastructure while avoiding overloaded airports, the company said.

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

Võ Huy Cường, Deputy head of the Civil Aviation Authority of Việt Nam (CAAV), said the authority had not received an application from FLC and Hải Âu. Vietstar Airlines, with charter capital of VNĐ800 billion, had not been given licences for its operation, as it was waiting for Tân Sơn Nhất’s expansion, despite having announced the flight plan since the beginning of last year.

Hải Âu’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 Hải Âu 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 Tân Sơn Nhất’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 Hà Nội and Đà Nẵng to Southeast Asian and Asian countries.

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