Category: Aviation

This is somewhat of a surprise in that the airline has been struggling for the better part of two years during which it has repeatedly downsized its fleet and number of routes…

The local airline industry has faced a number of challenges, particularly recovering from pandemic border closures which grounded most of their aircraft. Foreign investment and expertise could be one possible solution, however, investment in airlines in Vietnam is capped at 34 percent which can make influencing key decisions challenging…

With flight demand outstripping supply and the reputations of Vietnam’s airlines among lessors low, there are a myriad of ways Vietnamese airlines could benefit from an injection of foreign capital and expertise. Foreign firms, however, should make sure they have a full grasp on how the industry is tracking before embarking on any major decisions.

This adds to a growing list of legal action against the airline in recent years. This includes filings with the UK courts from SAF Leasing and Avolon Aerospace in May this year, a judgement in another lawsuit brought by Djinn Issuer mostly in favour of the claimant in October of 2023, and another brought by AWAS 6696 Ireland limited in May of 2023…

Despite certain stages of the first phase being ahead of schedule, however, several other parts are not moving quite so quickly. For example, the aircraft maintenance area, and operations centre, are at risk of falling behind schedule with the tender documents still not finalized. This could push back completion of the first phase, which is scheduled to be finalised by the end of 2025. 

A court in the UK has found that FitzWalter Aviation Holdings, which had a leasing agreement with Vietnam’s Vietjet, had the right to cancel said lease back in 2021. Vietjet had argued that the lease termination was illegal and had refused to allow four aircraft to be repossessed. The judgement

Vietnam’s airports have been a critical component in logistics  in Vietnam and subsequently in Vietnam’s economic development. They are the main entry point for most foreign investors, they facilitate millions of dollars of trade via air freight every day, and they have commanded huge amounts of public investment spurring the country’s economic growth. With this in mind, the new airport in Quang Tri should position the province well for future economic growth…

Of note, aside from keeping Pacific Airlines’ aviation licence, which requires the airline to have aircraft, it’s not clear why Vietnam Airlines is keeping Pacific Airlines alive. As a budget carrier it made some sense as competition to Vietnam’s biggest budget carrier Vietjet. These recently announced upgrades to Pacific Airlines, however, look to put the carrier in the mid-range segment which would make it direct competition with its parent company…

It’s not exactly clear why airline ticket prices have become such a huge focus in the local media and this could suggest that said coverage is slightly disproportionate to the problem it purports to cover. It’s also worth bearing in mind that the local aviation industry has been having a difficult time of late and this may be simply adding to its woes…

The Vietnam airline industry has been struggling broadly as a result of government regulated ticket prices, increasing fuel costs, and a debt hangover from the COVID-19 pandemic when the industry more-or-less ground to a halt. Bamboo Airways, in particular, only took to the skies in 2019 the year before the pandemic broke out. It also started life as a subsidiary of FLC Group which has been heavily mired in controversy after its leader was arrested back in 2022. This saw the airline spun off but the new independent entity has never had much success and has repeatedly downsized its fleet and the number of routes it offers…

For some context, Pacific Airlines has no planes because it gave them back to its lessor in exchange for having VND 3 trillion or US$118 million worth of debt cancelled. This was months ago and the airline hasn’t run a passenger flight since. With this in mind, it’s difficult to see any organisation other than Vietnam Airlines leasing aircraft to Pacific Airlines moving forward which could limit the airlines growth. 

For context, at the end of last year, the President of Vietnam Airlines noted that overcrowding at Vietnam’s airports was costing the national carrier US$20 million a year. Indeed, overcrowding has become a huge problem–Tan Son Nhat International Airport in Ho Chi Minh City was built for 28 million visitors a year but welcomed 34 million arrivals in 2022. Similarly, Hanoi’s Noi Bai International Airport was built for 25 million visitors a year but was expected to finish 2023 with 30 million arrivals.

The rising price of airfares in Vietnam has been in the news a lot lately. A review of airline ticket prices by the Vietnam Aviation Administration, however, after conducting a brief investigation, earlier this year, found that airfares prices have been within the current guidelines–in Vietnam airfares are regulated by the government.