Vietnam Business Channel

Vietnamese airlines are cleared for direct flights to the United States

The US Federal Aviation Administration announced last week that Vietnam complies with international safety standards and has awarded the country a “Category 1 rating” which will allow its airlines to fly to the United States and code-share with American carriers. Although there is a huge business and consumer tourism travel between the countries, there are currently no non-stop flights between the two countries.

At the US Embassy in Hanoi, US Ambassador Daniel J. Kritenbrink presented a letter from the FAA to Dinh Viet Thang, Director General of the Civil Aviation Authority of Vietnam (CAAV) and congratulated Vietnam on achieving a Category 1 rating, witnessed by Nguyen Van The, Vietnam’s Minister of Transport and leaders of the aviation industry.

The Category 1 status is based on an August 2018 FAA assessment of the safety oversight provided by the CAAV and is the result of years of diligent work by the CAAV and the Ministry of Transport.

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Flight attendants on the tarmac at Noi Bai International Airport in Hanoi. Photo: Bloomberg

Vietnam Airlines and Bamboo Airways have both expressed the desire to fly to the US, but were unable to do so until Vietnam received the Category 1 rating.

Vietnam Airlines is the country’s flag carrier and the airline currently flies to 64 destinations in 17 countries, excluding codeshare services with other airlines. International destinations include Frankfurt, London, Melbourne, Moscow, Paris and Sydney.

Bamboo Airways began commercial flight operations s in January and is initially flying on 37 domestic routes. The carrier has said that it plans to expand this year to Japan, Korea and Singapore – and in light of the FAA ruling will also consider flying to the U.S.

Dinh Viet Thang, from Vietnam’s Civil Aviation Authority commented on the FAS’s approval and said that direct routes to the US would create a range of new opportunities for Vietnamese airlines.

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A Bamboo Airways flight attendant on a flight from Hanoi

According to Dinh, “Non-stop flights from Vietnam to the US will be a brand new market full of potential for local airlines, as no international airline has operated them so far. The FAA said the decision means Vietnam complies with international safety standards “and has been granted a Category 1 rating under the agency’s International Aviation Safety Assessment program”.

Dinh added that, “Vietnamese air carriers that are able to secure the requisite FAA and DOT [Department of Transportation] authority can establish service to the United States and carry the code of US carriers>”

K. Ajith, Director, Asia Transport Research stated: “This will be a short in the arm for the Vietnamese aviation industry, including the MRO industry, as it would indicate that Vietnamese aircraft would have met the stringent maintenance criteria set by the FAA. It should also increase travel demand to and from Ho Chi Minh City and the airport could potentially develop into a hub.”

Vietnam’s Ministry of Culture, Sports and Tourism reports that U.S. tourists visiting Vietnam increased 11.9% in 2018 from the year earlier and there are also more than 2.1 million Vietnamese living in the U.S.

The International Air Transport Association (IATA) says that aviation is a fast growing industry in Vietnam and forecasts the country will be among the world’s top five fastest-growing air travel markets in the next 20 years. Data from Vietnam’s civil aviation regulator shows that air traffic has increased 16% on average each year from 2010 to 2017 and IATA forecasts that Vietnam will have 150 million airline passengers per year by 2025.

While Vietnam has waited for the FAA approval, other Southeast Asian airlines have been competing to stake their claim on the lucrative US market. Singapore Airlines flies direct to Los Angeles and San Francisco, and will launch a direct service to Seattle next month. The airline also operates the world’s longest non-stop flight between the Singapore and New York, which takes 18-1/2 hours.

Vietnam’s neighbor, Thailand, is waiting for a final round of inspections from the US Federal Aviation Administration to regain its Category 1 status that would allow it to resume flights to the United States. Thailand lost its air safety rating in 2015 after concerns were raised about whether authorities could properly supervise the nation’s booming aviation sector.

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A Bamboo Airways pilot at the controls of a flight

Krittaphon Chantalitanon, Vice President of Thai Airways expects that inspections will take place within the first half of this year. Krittaphon said that if the carrier relaunched flights to the U.S. it plans to fly to Los Angeles, New York, Seattle, Washington D.C. and will look at the availability to fly into other cities.

Malaysia Airlines also wants to resume flights to the United States but has to focus on its core business for now since the airline is losing money.

Izham Ismail, the airline’s CEO said that, “Our ambition is not North America for now. Our focus is on Asia Pacific and making the airline financially strong. Only then will we look at a timeframe of five years and beyond.”

Vietnam Airlines CEO, Duong Tri Thanh, had said earlier that the airline could face an average annual loss of $30 million in the first years of operation if it opens a direct route to the U.S. and that it would take at least five years for the national flag carrier to break even.

The Vietnamese government approved plans in 2018 to expand the network of national carriers to major markets including Australia, China, Europe and the U.S. Under these plans, Vietnam Airlines will go through with its proposal to open non-stop services to the U.S., starting with direct flights to San Francisco or Los Angeles.