Vietnam Airlines seeks to buy 50 narrow-body jets

Vietnam Airlines is seeking the go-ahead from the Ministry of Transport to purchase 50 narrow-body aircraft between 2021 and 2025 in a bid to secure a 55% share of the domestic air passenger transportation market and updating its existing fleet.

Vietnam Airlines seeks to buy 50 narrow-body jets

Deputy Prime Minister Truong Hoa Binh (6th L) attends the welcoming ceremony of the 100th aircraft operated by Vietnam Airlines, held in Hanoi on October 22, 2019 – PHOTO: VIETNAM AIRLINES


In a statement sent to the Department of Planning and Investment of Hanoi City, the ministry offered its feedback on the aircraft purchase proposal of the national flag carrier.

Vietnam Airlines is primarily looking at the Airbus A320 family, a narrow body twin-engine aircraft manufactured by Airbus, and the Boeing 737 MAX, a narrow-body aircraft series manufactured by U.S.-based Boeing Commercial Airplanes.

The move is intended to replace aircraft that have been in use for longer than 10 years and to increase its fleet to 135 units, including 90 narrow-body planes, by 2025. The new planes are expected to cost VND88.13 trillion (US$3.8 billion).

The ministry suggested the department instruct Vietnam Airlines to complete all the necessary paperwork for the proposal.

In considering two scenarios on aviation transportation until 2025, the flagship carrier aims to achieve a lower annual growth rate of 5.3% and carry a total of 39.5 million passengers.

The aircraft purchase plan will enable Vietnam Airlines and its affiliates – the low-cost airline Jetstar Pacific Airlines and Vietnam Air Services Company – to account for a 55% share of the air passenger transportation market.

Vietnam Airlines intends to replace 26 old planes being sold or with leases expiring by 2021 and to buy 24 others, with a projected delivery schedule of five units per year.

According to the ministry, the steady delivery will not place heavy and sudden pressure on the airport infrastructure or the management capacity of the ministry and the Civil Aviation Authority of Vietnam (CAAV).

The ministry confirmed that the proposal from Vietnam Airlines is aligned with a prime ministerial decision and the needs of the aviation market. However, the ministry also relayed a number of warnings.

The proposal has yet to present a detailed plan on developing a flight network for each year. Therefore, there are no grounds for assessing the appropriateness of the network based on market demand, aviation infrastructure and the policy on flight network development.

 

The ministry recommended Vietnam Airlines devise a plan on the development of flight routes, which should match the infrastructure at local airports, especially Noi Bai in Hanoi, Cam Ranh in the south-central province of Khanh Hoa, Tan Son Nhat in HCMC and the long-awaited Long Thanh airport in the southern province of Dong Nai.

In addition, the ministry urged Vietnam Airlines to recruit and train human resources to ensure the efficient operations of the fleet by 2025.

The ministry advised the airline to give more thought to the purchase of the Boeing 737 MAX 8 aircraft as these airplanes are being grounded around the world, including in Vietnam, following a crash in Indonesia in October 2018 and another in Ethiopia in March 2019, which have killed 338 people in total.

The airline should take a cautious approach in selecting engines for the Airbus A320/321neo family when it comes to Pratt & Whitney’s aircraft engines, due to recent incidents.

Last month, Vietnam Airlines signed a 12-year EngineWise Comprehensive service agreement for Pratt & Whitney GTF engine maintenance for the airline’s fleet of 20 Airbus A321neo aircraft with Pratt & Whitney, a division of United Technologies Corp. Vietnam Airlines entered service with the first A321neos in late 2018.

The ministry also asked the airline to formulate an environmental impact assessment report for the proposal. It noted that it will instruct CAAV to closely supervise plans to develop aircraft fleets by 2025 by Vietnam Airlines and other local airlines.

The strict management policy is intended “to ensure the numbers of aircraft operated by airlines match the needs of the market, infrastructure and oversight capacity and meet requirements on safety, security and service quality.”

Vietnam Airlines, a member of SkyTeam Alliance, owns the second-largest wide-body fleet of Airbus A350s and Boeing 787s in Southeast Asia and ranks among the top airlines in the Asia-Pacific region, with 14 Airbus A350-900s, 11 Boeing 787-9s and three Boeing 787-10s. It operates 94 routes to 18 domestic and 33 international destinations, with an average of 400 flights per day. SGT
 

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