Bamboo Airways, Vietnam’s newest entity in the country’s relatively saturated aviation industry, is planning to take-off to the skies for the first time on 16th January 2019, after failing to do so on two previously planned dates last year. The airline received the final green light from Prime Minister Nguyen Xuan Phuc and the Ministry of Transportation on 8 November 2018 after an intense meeting that saw the participation of several other core government organs.
An Airline with Headquarters in Central Vietnam
A subsidiary company of FLC Group JSC based in Hanoi, Bamboo Airways has its headquarters in Phu Cat Airport (IATA: UIH) of Binh Dinh Province. Phu Cat Airport serves most of the province and is approximately 35 km from Quy Nhon city, the largest city in Binh Dinh, known for its sandy shorelines and impressive geographical landforms. With 24 domestic routes and 16 international routes such as to Russia, Germany, Korea, China and Japan planned from now till 2023,
Bamboo Airways is exploring uncharted territory with its Hybrid Model. This purportedly combines the trustability of traditional full-service carriers and competitive pricing more commonly associated with low-cost carriers.
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Numbers not looking bright for Vietnam, aviation experts say
More easily said than done, though, based on observations by international experts.
An article published by Bloomberg on 1 August 2018 had a somewhat pessimistic view of domestic aviation market trends in Vietnam. Brendan Sobie, a Singapore-based analyst at CAPA Centre for Aviation, said to Bloomberg that “anybody coming into the market now is late”. According to Sobie, Vietnam’s annual domestic seat capacity growth has also been reduced to less than 10% in the last year or so. On a brighter note, he commented that international seat demand is increasing, with an estimated 20% growth annually in the last three years. This might explain Bamboo Airways’ ambitious plans to jumpstart its international route presence.
Trinh Van Quyet, chairman of Bamboo Airways, firmly believes that the growing middle class and its increasing desire to travel both domestically and internationally would bolster these numbers. Beyond its current inventory of 20 leased aircraft, parent company FLC Group JSC has commited to buying 24 Airbus SE A321 planes worth US$3.2 billion. In June 2018 FLC also finalised a contract with Boeing Co. for 20 twin-aisle 787-9 Dreamliners. Full delivery of these planes is expected in 2022.
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Real estate plans for Quy Nhon probably not just a coincidence
Perhaps not too coincidentally, FLC Group JSC is also a real estate developer. It recently announced a 600+ hectare real estate development with an estimated 70,000 resident capacity in Quy Nhon City. Located 19 km away from the city centre, Lux City Quy Nhon has been described by the developer as an eco-district that combines the natural characteristics of coastal Vietnam with the comfort of modern living. The self-sustainable eco-district is set to feature parks, clinics, mixed-used highrises, convention centres and several recreational facilities that exploit the province’s natural beauty. Much of the developer’s marketing material focuses on Quy Nhon’s connectivity to other major cities in both northern and southern Vietnam and Lux City’s suitability for retirement housing.
Evidently, with ticket deals linked to FLC’s resorts and golf courses on Bamboo Airway’s website, one might say that its entry to Vietnam’s aviation industry might be well aligned with Quy Nhon’s strategy to becoming the crown jewel of Central Vietnam.