Vietnam carriers begin race to operate US direct flights

By Dat Nguyen   March 5, 2019 | 10:27 pm PT
Vietnam carriers begin race to operate US direct flights
An aircraft flies over corn farm while landing at Noi Bai International Airport in Hanoi, Vietnam. Photo by Reuters/Kham
Vietnamese airlines are scrambling to begin direct services to the U.S. and have begun to place orders for aircraft.

Vietnam Airlines recently said it is considering buying at least two new long-range Boeing jets in preparation for beginning services from Ho Chi Minh City to Los Angeles or San Francisco in California in 2020.

Initially the flights would stop in Japan, Taiwan or South Korea before nonstop services begin in 2022, it said.

Vietnam Airlines is eyeing the Vietnam-U.S. West Coast route, which is estimated to have one million passengers a year, "the biggest unserved nonstop route," it said.

Bamboo Airways placed an order for 10 wide-body Boeing aircraft last week. Last year it had ordered 20 of the same aircraft, with the 30 together cost $8.6 billion.

The airline is preparing to launch flights to the U.S. in late 2019 or early 2020, it said in a statement.

But it fully expects a number of challenges.

CEO of Vietnam Airlines Duong Tri Thanh said: "In the airline business, the longer the route, the more competition you face."

The route is likely to be unprofitable for 5-10 years and the airline would need government subsidies, he said.

Thanh had said earlier that Vietnam Airlines could suffer average annual losses of $30 million in the early years of operating direct flights to the U.S.

Rival Vietjet has also expressed interest in the direct route, but it has yet to place an order for wide-body jets. The airline currently has no aircraft capable of flying directly to the U.S.

Earlier this month the U.S. allowed Vietnamese airlines to operate direct flights to its cities.

An ethnic Vietnamese population of over 2.1 million in the U.S. is expected to be a steady source of travel demand, industry insiders said.

Vietnam’s aviation industry has been booming in recent years. Its airlines served almost 50 million passengers last year, up 10.1 percent from 2017, according to the Civil Aviation Authority of Vietnam.

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