Direct US flights: Vietnam's 16-year-old dream remains unfulfilled

The Ministry of Transport in 2003 ordered Vietnam Airlines to begin direct services by 2005.

Not only did it not comply but to this day the flag carrier remains concerned about the route’s profitability though it received a permit from the U.S. Department of Transportation for direct flights in September.

Its CEO, Duong Tri Thanh, said it would be difficult to attract passengers with direct flights, referring to the fact they would be more expensive than a flight with a stopover en route.

Direct flights would thus appeal mostly to business-class passengers, but their current number is not large enough to make the flights profitable, he said.

Echoing Thanh, Nawal Taneja, an aviation expert at The Ohio State University, said business-class passengers should be the focus since they travel regularly and are willing to pay more for speed and efficient service. There should be daily flights, he added.

Another concern is logistics. Thanh said as of now his carrier has no large aircraft that can be deployed on this route, and the bigger Boeing 777X and Airbus A350-1000 would only be available in 2022. Its current Boeing 787 would not be cost effective, he explained.

Vietnam Airlines also needs to meet certain requirements from American authorities to operate a direct route, such as making its website accessible to blind people, he added.

Vietnam received a Category 1 rating from the U.S. for a direct service in February, but no other Vietnamese carrier except Vietnam Airlines has received individual permits to fly directly.

Budget carrier Vietjet has expressed interest in the direct service, but has not taken any steps toward starting it. The airline is still focused on 5-6 hour flights with its narrow-body fleet.

Its Deputy General Director, Dinh Viet Phuong, only said recently that Vietjet would fly to the U.S. at the right time "when all conditions are met," without giving specifics.

Private carrier Bamboo Airways has been the most vocal so far, with Chairman Trinh Van Quyet even estimating that by charging $1,300 for a return ticket, the carrier would earn profits of VND8 billion ($346,000) a month.

These figures are based on operating a leased 240-seat Boeing 787-9, he said, adding if the airline is able to lease an Airbus A350 with a capacity of 253-300, the profits would go up to VND28 billion ($1.2 million).

The airline took delivery of its first wide-body Boeing 787-9 Dreamliner this month, and plans to use it for direct flights to the U.S. in late 2020 or early 2021. Bamboo Airways is in the process of acquiring licenses from the U.S.

But challenges remain even if it gets a license.

"The U.S. is currently a market with relatively fierce competition,"  Civil Aviation Authority of Vietnam (CAAV) head Dinh Viet Thang said.

He explained that Vietnamese carriers would have to compete with foreign airlines already operating one- or two-stop flights between the two countries, and careful calculations are needed before direct services are begun.

There are many options now to fly from HCMC or Hanoi to the U.S., with stops in Singapore, mainland China, Taiwan, or Japan, with prices starting at around VND10 million ($430) one way.

But operating a direct service is important to Vietnamese airlines since the U.S. is the largest economy and aviation market in the world, Thang said.

In Southeast Asia, Singapore and the Philippines operate non-stop flights to the U.S. Others like Thailand, Indonesia and Malaysia fly with one or two stops.

American carriers faced the challenges Vietnamese airlines face now, and stopped direct flights between the two countries long ago. United Airlines launched a direct service in 2007 but pulled the plug on it in 2012, while Delta Air Lines flew for a mere six months in 2008. No American carrier has flown again on the route due to low cost efficiencies.

But experts say demand for direct flights is now higher than in those years.

The Vietnamese diaspora of over 2.1 million in the U.S. is expected to be a steady source of demand. The number of tourists coming to Vietnam from the U.S. grew by 11.9 percent from 2017 to 687,000 last year, according to the Ministry of Culture, Sports and Tourism.