Vietnam’s airlines need around $1,300 per passenger to fly to US

17-Aug-2019 Intellasia | Vietnamnet | 6:02 AM Print This Post

Bamboo Airways, the private airline which has just joined the market, plans to provide non-stop flights from late 2020 or early 2021. Meanwhile, older carriers still have not made any statements about the matter.

In one year, the US will inspect the CAT1 certificate that it granted to Vietnam in February 2019 to find if Vietnam still can meet the requirements to provide flights to the US.

Meanwhile, Bamboo Airways plans to fly to the western coast of the US by the end of 2020. It would carry passengers to California or San Francisco at airfares from $1,100 per passenger, or VND25.3 million to $1,300, or VND30 million.

While some analysts think that non-stop flights to the US would bring losses, Bamboo Airways’ chair Trinh Van Quyet denied this. The airline plans to fly to the US with Boeing 787-900s that the US aircraft manufacturer plans to deliver later this year.

A question has been raised that if Boeing 787-900 would meet technical requirements and if it can provide enough fuel for long-distance 12,000 kilometer flights (with departure from HCM City) and 18,000 kilometer flights (with departure from Hanoi).

Experts affirmed that flying non-stop will be possible in the condition of 30 percent load reduction. For instance, B787-900 will have to cut 93 out of 310 seats.

Quyet estimates the total costs for non-stop flights to the US as follows: the aircraft charter is $1 million a month (VND23 billion), fuel cost VND61 billion (175 tonnes per flight), technical cost VND16 billion a month and in-land service VND1 billion.

As such, the total cost to operate one aircraft is VND113 billion. If flying 17 days a month, selling return tickets at $1,100 per ticket and selling 240 tickets per flight, the carrier would take a loss of VND14 billion a month.

Meanwhile, if selling tickets at $1,300 or higher, the carrier would make a profit of VND8.4 billion at least.

The planned airfare of $1,300 are attractive to passengers as airfares set by Cathay Pacific and Japan Airlines are about $1,600-1,800.

According to Vo Huy Cuong from CAAV, the market conditions determine the success or failure of the flights to the US.

He said there are about 2 million Vietnamese people in the US have the demand of flying between Vietnam and the US frequently. The Vietnamese community in the US and the community of Vietnamese overseas students (24,000) account for 75 percent of regular passengers.

However, they live in different cities and are not regular passengers. Meanwhile, business passengers only account for 40 percent. Therefore, it is difficult to define destination points to ensure the effective exploitation of the air routes.


Category: Business, Vietnam

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