Following their recent awarding of Category 1 by the FAA, Vietnam Airlines are looking to purchase two widebody aircraft for their US routes. Under consideration are the two most in demand jets of the moment, the Boeing 777X and the Airbus A350.
Vietnam Airlines are looking to order two widebody aircraft to service their newly approved routes between HCMC and California and are weighing up the Airbus A350 and the Boeing 777X for the order.
CEO of Vietnam Airlines, Duong Tri Thanh, said they were interested to stimulate competition between the two plane making giants. Speaking to Bloomberg he said:
“It will be an opportunity for Vietnam Airlines to invite competition between the aircraft manufacturers, mainly Airbus and Boeing. The final plan will be submitted to the government. We expect something to happen this year.”
In addition to the widebody purchase, Vietnam Airlines are also looking at a purchase of up to 100 737 MAX aircraft to replace their fleet of aging Airbus single aisle jets. Although the MAX model was unspecified, it’s looking likely to be the popular MAX 8, which would make the order worth up to $12bn at list prices.
One the order is placed, Thanh has said that they expect aircraft to be delivered between 2020 and 2030.
The 777X versus the A350
It seems carriers fall into one of two camps when it comes to the renewal of widebody jets. You’re either Airbus or you’re Boeing, with both the 777X and the A350 offering amazing range, high capacity and unrivalled economy.
It comes as no surprise, therefore, to hear that Vietnam Airlines are considering the two aircraft side by side for their widebody fleet. Reports suggest they are looking to purchase at least two widebody planes for their US services, following recent regulatory approval for their air safety system.
Vietnam Airlines aviation safety system was given US approval by the FAA just over a week ago, which will allow the airline to fly to the US. Having secured a Category 1 rating, it’s a testament to how much the Vietnamese aviation industry has matured over the past few years, and is also a boon for Delta, who codeshare with the carrier.
We recently reported that Qantas were considering one of the two widebodies for their ‘project sunrise’ mega-route from Sydney to London. Thai Airways and Korean Air are also weighing up the rival jets for their fleet renewal also.
Whichever aircraft they plump for, they are planning to move quickly to launch their US services. Flying from their hub at Ho Chi Minh City, initial routes will run either to Los Angeles or San Francisco, both of which are home to a large Vietnamese-American population, according to the carrier.
Unprofitable for 10 years
Although the ambitions of the airline are admirable, they seem to be going into this new venture with their eyes wide open. Thanh has already stated that, taking into account the distances and competition on the route, they expect their Vietnam to California route to be unprofitable for up to 10 years, requiring state subsidy as a result.
It’s not the only place that Vietnam Airlines are facing tough competition. Bamboo Airways took their first flight last month, launching service to 37 domestic routes with their fleet of Airbus narrow body planes.
But it seems Vietnam has the demand to support both these carriers, and probably a lot more besides. In the past decade, Vietnamese aviation has grown by some 17.4%, making it one of the fastest growing aviation industries in the world today.
Low cost carrier VietJet is expanding rapidly, with 325 aircraft on order from both Boeing and Airbus, and Air Asia is looking to increase services to Vietnam too. Although this would usually spell trouble for a flag carrying airline, with Vietnam Air being almost 90% state owned, it’s unlikely they’re going to run into too much trouble.
Overall, it’s great to see Vietnam Airways expanding, and we’ll be excited to see which widebody jet they pick for their fleet.