Vietnam’s startup airline, Bamboo Airways, is set to receive its first Airbus A320neo next month. This will be the first aircraft of its type in Vietnam. It is also the first of the 24 Airbus A320neo aircraft agreed in a purchase order between Airbus and Bamboo Airways in March last year.
Established in 2017 as a subsidiary of FLC Group, a Vietnamese construction conglomerate, Bamboo Airways signed a deal in March 2018 for 24 Airbus A320neo aircraft. The delivery of the first plane is due to take place next month. Airbus has delivered over 1,000 A320neos worldwide and has over 6,600 firm orders, including the 24 for Bamboo Airways.
The A320neo family of planes are designed to be fuel-efficient, with up 20% less fuel burnt and 50% less noise pollution than other aircraft.
What are Bamboo Airways’ plans for growth?
Airwise notes that the airline currently operates 28 domestic and international flights and has its sights set on providing over 37 routes by the end of 2019. This rapid expansion will be assisted by the 20 new aircraft it has on order from Boeing.
In a statement the airline said;
“In the coming time, Bamboo Airways will focus on expanding and modernizing its fleet with the focus on increasing the number of wide-body Boeing B787-9 Dreamliner and narrow-body Airbus A321 aircraft.”
The airline purchased the new aircraft to help transition it away from leasing planes to having its own fully-purchased fleet. According to Nasdaq, Bamboo Airways currently has a fleet of 10 leased aircraft and hopes to raise $100 million from a proposed IPO in 2020.
The airline’s main competition is the state-owned Vietnam Airline and budget airline, VietJet. Bamboo Airways plans to offer 5-star service and has several classes including Bamboo Eco, Bamboo Plus, Bamboo Business, and Bamboo First.
With recent purchase orders estimated at over $8.7 billion USD, Bamboo Airways has big plans to put Vietnam on the international aviation map. In August, the Deputy General Director of Bamboo Airways, Mr. Mai Dinh Toan, said that “Reaching to Europe and Flying Directly to the US is Main Goal” by 2020.
But can Vietnam support an airline with such big ambitions?
Well, the aviation market in Vietnam has seen double-digit growth in the past ten years with the IATA recording a 17.4% growth rate and Reuters stating that over 106 million passengers passed through the country’s airports in the past year, a 13% rise on previous years. This means that Vietnam is one of the fastest-growing aviation markets in the world.
The Vietnam Aviation Expo stated that the current level of growth in the industry will require at least 10 new airlines to meet growing demands. So Bamboo’s plans to grow it’s fleet, although perhaps somewhat grandiose, is mostly in line with industry expectations.
Are Bamboo Airways’ plans for growth proof that there is still room for more airlines in the Vietnamese market? Or are they reaching too far? Let us know what you think in the comments.