New airlines are rising in an industrial landscape long dominated by Vietnam Airlines
Reports of Bamboo Airways, a three-year-old aviation firm, operating more flights between Hanoi and Ho Chi Minh City than veteran air carrier Vietnam Airlines during Vietnam’s busiest travel week have shocked travel experts from across the country.
According to flight data, Vietnam Airlines made just 113 trips between Hanoi and Ho Chi Minh City during the one-week span from February 8 to 14, which coincided with the 2021 Lunar New Year holiday.
Comparatively, Bamboo Airways made 130 trips on the same route.
Flights between Vietnam’s two largest cities are considered critical to airline success given consistent demand and high profits.
Still, more flights do not necessarily mean more success.
More data related to how many seats were sold aboard each flight and how each carrier fared on its other routes is needed in order to truly judge who came out on top during the holiday season.
What the numbers do show, however, is the intensifying competition between Vietnam’s homegrown airlines, particularly as COVID-19 continues to keep thousands of passengers grounded.
According to a report on Vietnam’s aviation industry released in January, domestic airlines collectively operated 19,295 flights, with Vietnam Airlines and Vietjet each accounting for 6,000-7,000 departures, or twice as many as Bamboo Airways’.
Meanwhile, three-year-old Bamboo Airways seems to be gradually winning passengers’ hearts thanks to its high service quality.
As international operations remain in hibernation, the country’s six carriers – Vietnam Airlines, Vietjet, Bamboo Airways, Pacific Airlines, Vietravel Airlines, and VASCO – are each scrambling for ways to convince travelers that they offer the best product, including setting prices as low as VND85,460 ($3.7) for the Hanoi – Ho Chi Minh City route.
Customers’ gain
Similar to Vietjet’s recent success, the surge of customers flocking to Bamboo Airways reflects the significant role played by private airlines in Vietnam in an industrial landscape long dominated by national carrier Vietnam Airlines.
Not only beaten by Vietjet in the domestic flight category, Vietnam Airlines and its subsidiary VASCO are also facing tough competition from Bamboo Airways on the Ho Chi Minh City – Con Dao or Rach Gia – Ca Mau routes.
Under the shadow of the current COVID-19 crisis, Vietnam Airlines is the only domestic carrier to benefit from the government’s bailout package after it reported a VND14 trillion ($610 million) loss in 2020.
Meanwhile, Vietjet and Bamboo are pulling themselves by the bootstraps to negotiate debt rescheduling and the sale of assets, which in turn have helped them post profits of VND70 billion ($3 million) and VND400 billion ($17.4 million), respectively, in 2020.
According to experts, Bamboo’s success over Vietnam Airlines on one route during one week cannot be used to reflect the entire industry, considering the aviation sector tends to reward those who achieve optimal cost management, sound ticket pricing, and decent customer service over an extended period of time.
During the current travel slump, experts recommended that the government maintain fair competition in terms of policy and bailout programs in order to ensure customers’ gain and avoid reinstating a monopoly in aviation.
