Aviation market growth soars as airlines continue to expand

Vietnam’s airlines have been buying more aircraft, expanding fleets and opening new air routes in recent years at a rapid pace.

Vietnam Airlines, the nation’s flag air carrier, now owns 100 aircraft and plans to receive 17 Airbus A321 Neos and 3 B787s this year.

In late February, at the US-DPRK Summit, Vietjet Air, which now has 64 aircraft, signed a contract to purchase 100 Boeing aircraft worth $12.7 billion. The first aircraft of the deal would be delivered in the fourth quarter of 2019.

Vietjet’s CEO Nguyen Thi Phuong Thao said the airline is following a strategy on expanding its international and national networks, and developing a new modern fleet is key to its long-term development strategy.

Bamboo Airways, which has just joined the domestic aviation market, has also signed a contract to buy 10 Boeing 787-9s Dreamliner worth $3 billion. Prior to that, it bought 20 aircraft of the same model worth $5.6 billion.

In the near future, Bamboo Airways will have 30 wide-body airplanes and the first aircraft of the order will arrive in Q2 2020.

Deputy head of CAAV Pham Van Hao said at a workshop discussing solutions to accelerate Vietnam’s aviation industry in mid-April that the industry is witnessing the strongest ever growth in many decades. Two-digit growth rates have been reported for the last five years.

In 2012, there were 37 million air travelers, while the figure rose to 94 million in 2017 and is expected to reach 112 million by the end of the year. Regarding the number of aircraft, the figure has increased from 60 in 2008 to 192.

In IATA’s report, Vietnam ranked seventh among the fastest growing markets in the world in 2013-2017, while it is hoped to join the top 5 by 2035.

Vietnam’s CAGR in 2016-2021 is 17.4-20 percent, much higher than the 6.1 percent of ASEAN.

Air carriers have also geared up with plans to open new air routes as they have been encouraged by a new government initiated plan to enhance the connectivity of aviation and targeted tourism markets.

Under the plan, Vietnam would open new air routes and increase the frequency of the existing air routes between Vietnam and key tourism markets, including the US, France, UK, Japan, South Korea, China, Russia, Australia and India.

A representative of Bamboo Airways revealed that the purchase of Boeing 787-9 Dreamliners will serve the airline’s plan to provide non-stop flights between Vietnam and the US, slated for the end of 2019 or beginning of 2020.

Meanwhile, Nikkei Asian Review quoted its sources as saying that the non-stop air route between Vietnam and the US may be launched this year, not 2020 as initially expected.