Bamboo Airways expects profit from direct Vietnam-US flights

By Anh Tu   August 2, 2019 | 05:12 pm GMT+7
Bamboo Airways expects profit from direct Vietnam-US flights
A Bamboo Airways aircraft prepares to land at Tan Son Nhat International Airport in Ho Chi Minh City. Photo by Shutterstock/Huy Thoai.

Bamboo Airways expects competitive fares and strong demand for direct flights to the U.S. will help it make good profits.

Chairman Trinh Van Quyet said at a forum Thursday that by charging $1,300 for a two-way ticket, the carrier will earn profits of VND8 billion ($346,000) a month.

As Japan Airlines charges $1,600 for a direct flight from Japan to the U.S., and Cathay Pacific over $1,300 from Hong Kong, $1,300 from Vietnam is a competitive price, he said.

These figures have been calculated on the basis of operating a leased 240-seater Boeing 787-9. If the airline is able to rent an Airbus A350 with a capacity of 253-300 seats, profits go up to VND28 billion ($1.2 million) a month, he added.

In case there is low occupancy, Bamboo Airways would reduce the number of flight days from 17 to 15 per month, the chairman said.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said that Bamboo Airways might suffer losses in the early stages, but will profit in the long run, thanks to a population of 2.1 million Vietnamese in the U.S. and a large demand for tourism and overseas study between the two countries.

Bamboo Airways, which launched its first flights earlier this year, is in the progress of acquiring permission for the direct route and plans to start flying non-stop next year. It has placed an order for 10 Boeing 787-9 aircraft.

Vietnam in February received a Category 1 rating from the U.S. Federal Aviation Administration (FAA), which means the former meets safety standards to operate flights to the U.S.

National flag carrier Vietnam Airlines is also interested in the direct route. But its CEO Duong Tri Thanh has said that annual losses on the U.S. sector could run to $30 million in the early years, and the route is likely to be unprofitable for 5-10 years.

Industry insiders say tourists coming to Vietnam from the U.S. would be a major source of demand for direct flights. This number rose by 11.9 percent last year to 687,000, according to the Ministry of Culture, Sports and Tourism.

Currently there are no direct flights, and passengers have to transit through places like mainland China, Hong Kong and Japan, and flights take 18-21 hours. A direct flight would bring the travel time down to 14-16 hours.

 
 
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