VietNamNet Bridge - Both Vietnamese and international analysts say that establishing a new air carrier was an audacious but risky step taken by the dollar billionaire Trinh Van Quyet.  

FLC has signed a contract on purchasing 20 Boeing 789 Dreamliners

FLC Group has announced it has inked a contract on purchasing 20 Boeing 789 Dreamliners worth $5.6 billion.

FLC’s president Trinh Van Quyet said Bamboo Airways has prepared infrastructure and labor force to be able to provide have commercial flights in October.

“I am sure 99 percent that Bamboo Airways would take off in 2018,” Quyet said.

Bamboo Airways will provide domestic flights to all provinces/cities in Vietnam where there are airports. Besides, it will also open international air routes from Vietnam to Thailand, South Korea, France, Germany and the US.

The big deal of FLC purchasing such a big number of aircrafts caught the special attention from the US press.

Quyet told the Washington Post that he plans to set up 16 domestic routes and 10 international routes.

“The deal with Boeing is only the first step for us. We want to have more than 100 planes in the future,” he said in the newspaper.

The Washington Post quoted experts as saying that FLC Group is “undertaking substantial risk by wading into the airline”, and that “placing such a large order without testing the market first is seen as highly unusual”.

In general, an airline buys a few airplanes first and waits for the market to materialize. But Bamboo Airways’s move was described as “ignoring basic financial planning for an airline”.

Vietnamese experts also warned against FLC’s “fast flight and fast victory” business plan.

An analyst commented that Quyet was “overly confident” about FLC’s capability, while the aviation market is “full of pitfalls”.

Another analyst said he is not sure if the Vietnamese market is large enough for another air carrier besides the three that operate - Vietnam Airlines, Jetstar Pacific and Vietjet.

He said that in the past, Air Mekong and Indochina Airlines existed for several years before they stopped operations. Meanwhile, Vietjet needed four years to prepare before its first commercial flight.

Bao Viet Securities (BVSC), in its report about Vietnam’s aviation, released in early 2018, also commented that the two largest air carriers Vietnam Airlines and Vietjet are covering nearly the entire domestic flight market and each represents one business model. Vietnam Airlines flies as FSC (full service carrier) and Vietjet as LCC (low cost carrier).

Bamboo strives for 100 airplanes; Vietnam Airlines, 116 by 2018; Jetstar Pacific, 30 by 2020; and Vietjet, 219 by 2023.

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