Vietnamese Airlines Prepare To Fulfill Growth Ambitions

Taking a page from Vietnam Airlines, private low-cost carrier VietJet Air has announced plans to order aircraft from Boeing as it looks to build on its explosive growth over the past year and a half. On July 8, VietJet penned an agreement with the U.S. jet maker to collaborate and expand the airline’s future fleet with Boeing aircraft. While the sides revealed no further details, VietJet has taken an aggressive stance toward adding new airplanes in recent years.

Last year the carrier roughly doubled its fleet and passenger traffic, finishing the year with 20 aircraft and six million travelers carried. At the Paris Air Show in June, VietJet signed a contract for six more Airbus A321s as part of a bumper order for up to 100 aircraft over a span of 10 years.

VietJet’s deal comes just days after Boeing signed a similar agreement with state-owned Vietnam Airlines. In a ceremony held on July 6 in Washington, D.C., the flag carrier welcomed its first Boeing 787-9 Dreamliner, one of 19 on firm order. The two companies also inked a memorandum of understanding to negotiate the sale of eight 787-10s and eight 777-8X widebodies.

Vietnam Airlines recently became the second customer in the world to operate the Airbus A350-900. On June 30 the Vietnamese flag carrier took delivery of the first of 14 of the airplanes expected to enter the fleet. The deal includes 10 on order from Airbus and four under lease agreements.

With fellow competitors such as Malaysia Airlines and Thai Airways facing financial difficulties, Vietnam Airlines appears in a strong position to reach its goal of becoming the second largest full-service carrier in Southeast Asia by 2020. While the airline previously faced restrictions from expanding its long-haul service due to logistical problems involving short-term leases, it now has turned much of its attention toward serving the North American market.

Overall, Vietnam Airlines and Vietjet’s expansion plans align with the country’s growing middle class, which economists expect to double in the next five years. For its part, the government has announced an aviation master plan to operate 26 airports by 2020, starting with a new $16 billion facility near Ho Chi Minh City. Developers expect Long Thanh International Airport to accommodate 100 million passengers a year by 2050.