Is Vietnam’s air travel market big enough to accommodate another air carrier?
With growing middle-class wealth and plummeting air ticket cost, Vietnam has seen impressive growth in the aviation industry in recent years. This lucrative market is attracting many newcomers aspiring to get a piece of the country’s aviation pie. Before 2018, local tourists were served by national carrier Vietnam Airlines and three budget airlines Jetstar Pacific, VietJet Air and VASCO.
In 2018, real estate conglomerate FLC Group launched Bamboo Airways, a hybrid airline based in Quy Nhon. After several delays, the Ministry of Transport finally granted it aviation license last November; its first flight, a Saigon-Hanoi flight, took off on January 16.
Bao Giao Thong reported recently that Vietnamese travel agency Vietravel has officially thrown its hat in the ring by submitting a proposal to establish its own aviation company, Vietravel Airlines, to the Thua Thien-Hue Department of Transport, where its headquarter will be if approved.
Of course, the company will have to jump through various hoops like its predecessor Bamboo Airways to get a license. Specifically, it needs to prove to the government that it can satisfy requirements in terms of aircraft, administration, funding, and business strategy, among others.
According to a recently proposed set of guidelines by the Ministry of Transport, new airlines must have at least VND300 billion in capital to operate a 10-plane fleet. This figure changes to VND600 billion and VND700 billion for 11-30 planes and over 30 planes, respectively.
Just less than a week ago, Vietnam also welcomed another positive development: the US Department of Transportation’s Federal Aviation Administration (FAA) announced through a statement that the local aviation industry meets international safety standards. This effectively granted the country permission to conduct direct flights to the US in the future.
[Photo/CC BY]
