By Winston Shek
Vietnam Airlines plans to launch flights to the United States
Vietnam Airlines’ board of directors on Wednesday approved a plan to launch direct services to the United States. As part of the plan, the Vietnamese-flagged carrier will begin its flights in two phases.
First, Vietnam Airlines will ask the United States Department of Transportation for further repatriation flights, which took place on Monday. It previously operated twelve repatriation flights at the start of the pandemic, repatriating Vietnamese and American citizens to and from San Francisco, Washington DC and Houston.
When the airline receives government approval, Vietnam Airlines plans to launch weekly flights from Ho Chi Minh City, Vietnam, to San Francisco. Weeks earlier, the flag bearer had posted a schedule of the route, although it is not known if this is the final schedule. According to the proposed schedule, flights depart Ho Chi Minh City at 7:25 p.m. and land in San Francisco at 7:30 p.m. On the way back, the flight departs San Francisco at 10:00 p.m., stops in Anchorage, Alaska, before landing in Ho Chi Minh City at 6:40 a.m.
Initially, the line will operate once a week, increasing to three times a week depending on demand. Although planned as A350-900, vnexpress.net reports that the flight will be operated by a Boeing 787 Dreamliner. If this is true, Vietnam Airlines’ A350-900 and B787-9 should provide sufficient range for non-stop flights. In the past, Vietnam Airlines had used the B787-10 on flights between San Francisco and Hanoi, which required a stopover in Anchorage.
These flights will primarily serve Vietnamese citizens who wish to return home, with entry into Vietnam prohibited to everyone except essential business or government travel. In addition, it will meet essential travel needs between the two countries such as diplomats, businessmen, foreign students and relatives returning to the United States.
The âphase 1â of the repatriation flights will see little or no competition, as Vietnam Airlines will have the exclusive monopoly on flights from the United States to Vietnam, which will allow it to offer higher fares. From Vietnam to the United States, the airline will face less competition than normal conditions before COVID-19, especially due to the lack of presence of Chinese carriers.
To justify the move, Vietnam Airlines said that a sale-leaseback of its surplus long-haul aircraft had encountered numerous difficulties, leading it to use its surplus long-haul aircraft to launch flights to the United States. United. The airline hopes to be able to generate additional revenue if it launches flights to the United States.
In addition, these flights will be used as data to assess the market and prepare the facilities for a subsequent launch of their second phase of operations to the United States. In their second phase, Vietnam Airlines is planning permanent commercial operations for the United States, pending an assessment of the resumption of market conditions in 2022. If so, the airline would have the option of expanding its offering to other American cities like Los Angeles, home to one of the largest Vietnamese diasporas in the United States.
In its May 2019 Foreign Air Carrier Permit, Vietnam Airlines has the right to fly to Seattle, Los Angeles, San Francisco, New York and Dallas with possible intermediate stops in Taipei, Taiwan, Osaka, Japan and Nagoya, Japan. In addition, the carrier can share codes up to 25 points in the United States with its partner Delta Airlines. If Vietnam Airlines chooses to fly to Los Angeles, it can feed Delta’s route network to large Vietnamese diasporas like Washington DC area, Houston area, etc.
With flights to the United States, Vietnam Airlines will face profitability issues due to the low-performing nature of the market due to the strong pre-COVID competition. In a 2019 filing, Vietnam Airlines said it expected losses of $ 54 million in the first year on a hypothetical Ho Chi Minh City to Los Angeles route. Meanwhile, in a 2018 interview, Vietnam Airlines CEO Doung Tri Thanh said, âVietnam Airlines could face an average annual loss of $ 30 million in the first five years of operation if we let’s open a direct route to the United States. ”
Ultimately, since the airline is majority government owned, the flights will serve the government’s desire for growth. According to an interview with Reuters, âThe company’s philosophy is to help the economy and to try to be viable and profitable. But growing the economy is more of a mandate. You can see that on most intercontinental routes we are not making any money. But we do help get people in and out.