Vietnam airlines’ expansion plans hindered by aviation authority’s limited governance capability

Vietnamese airlines are facing difficulties to carry out their plans to acquire new airplanes due to the limited governance capability of the Civil Aviation Authority of Vietnam (CAAV), Zing reported. 

In a letter in response to startup airline Bamboo Airways, CAAV said due to limited resources, the agency could only supervise 256 airplanes registered under Vietnamese nationality. 



Previously, Bamboo Airways – backed by conglomerate FLC Group – proposed to operate 40 airplanes by the end of 2019. Taking in to account the number of airplanes subject to be delivered of other airlines, the total number of aircraft in Vietnam as of December 31, 2019 would reach 277, up 61 from the current number and exceeding the supervisory capability of CAAV by 21 airplanes.



Vietjet Air in its 2018 annual report revealed the airline would take delivery of 100 new airplanes from Boeing and Airbus in the 2019 – 2023 period, including the A320 and 737 Max. 



During the 2019 – 2024 period, Vietjet Air would receive 20 aircraft per year, taking the fleet under its management to 76 by the end of 2019 instead of the current 64. 



In the annual general meeting, national carrier Vietnam Airlines announced in 2019 it would put into operation an additional 20 A321neo aircraft, while offloading five A321neos dated 2004 – 2005. 



Vietnam Airlines’ 20 new airplanes would include aircraft under wet and dry leasing, the airline also plans to purchase 50 narrow-body aircraft and 10 back-up engines for the 2021 – 2025 period, of which Boeing 737 Max and A321neo are under consideration. 



An official from Vietnam Airlines said its contract of 50 narrow-body aircraft has a clause for purchasing  another 50. 



Recently, the airline has received the 14th Airbus A350-900 in April, the last in its contract with Airbus. 



According to Planespotter, Bamboo Airways currently has a fleet of nine aircraft plus one on order. The airline is in the process of seeking a new aviation license with registered capital of VND1.3 trillion (US$55.76 million), aiming to raise the permitted number of aircraft from current 10 to over 30. 



Trinh Van Quyet, FLC Group’s CEO, said Bamboo Airways expects to expand its fleet to 40 airplanes, however, the number is exceeding CAAV’s supervisory capacity. 



Vietnam currently has a total of five airlines, including Vietnam Airlines, budget operator Jetstar Pacific Airlines (partly owned by Vietnam Airlines), budget carrier Vietjet Aviation, Vietnam Air Services (VASCO) and Bamboo Airways. 



Vietravel, a leading tour company in Vietnam, is also seeking to set up an airline specialized in charter flight.