Two Vietnamese airlines, which are Vietnam Airlines and Bamboo Airways, are in the process of realizing the big dream of expanding their Vietnam – US direct flight routes, knowing that they are not the first airlines trying to take advantage of this potentially large aviation market. However, the sweet lemonade they want to make is very challenging with many sour lemons that once scared some of the US airlines.
Launching direct flights between Vietnam and the US: the sweet lemonade...
Vietnam – US aviation market is said to have great potential as this is one of the markets with the largest passenger traffic among other international routes in Vietnam, with an average statistics of about 700,000 to 800,000 passengers per year. There are many airlines that are operating flights between Vietnam and the US; however, there are nearly no direct flights at the moment.
So how can people travel between Vietnam and the US? All passengers departing from Vietnam must choose the routes with connecting flights from Hong Kong, Taiwan, Korea, etc. Thus, it takes a passenger from Vietnam about 20 hours and possibly up to 26 hours to fly and transit before being able to set foot in the US. Meanwhile, the direct route between Vietnam and the US offers the experience lasting 15–16 hours only, shortening four to five hours compared to the current average time of 20 hours. Besides, this direct flight route is also able to avoid problems that may arise during transit or connecting flights.
In the past, there were a number of US airlines that established direct flights between Vietnam and the US such as Delta Air Lines and United Airlines; however, they had no choice but to stop operation of this route due to inability to make up for the huge losses right from the beginning. United Airlines used to conduct direct flights from Vietnam to the US for five years, from 2007 to 2012, while Delta Air Lines tried to step into this market in 2008 and endured for six months before calling it quits. This shows that despite the great potential, the aviation market of direct flights between Vietnam and the US contains many challenges that terrify major US airlines.
Recently, there are two Vietnamese airlines that have announced to be granted licenses and flight slots to fly directly to the US. Vietnam’s flag carrier, Vietnam Airlines, received its license in September 2019 while Bamboo Airways announced its flight slots in April 2021. In order to realize the dream of flying straight from Vietnam to the US and exploit this potential aviation market, what do Vietnam Airlines and Bamboo Airways have to prepare?
… and the lemons the airlines have to face
Regarding the administration process, all airlines have to complete many complicated procedures before launching their first flight to the US. First, airlines must get license flight slots from the US Department of Transportation – this is the basic step that both Vietnam Airlines and Bamboo Airways have completed. However, the latter steps in the procedures are much more rigorous and challenging. Since the United States is a federal country, the airlines have to apply for not only the Government’s verification by Federal Laws but also the State Laws of each destination.
Specifically, the airlines have to obtain a license from the US Air Transport Security Administration (TSA), which is most rigorous since TSA has to go on-site to survey Vietnam’s airports and ensures that its counterparts meet all security standards in the US regulations. Only then can the airlines start their next step as gaining the license from the TSA will enable them to be verified by the Federal Aviation Administration (FAA). Currently, both Vietnam Airlines and Bamboo Airways are still in the process of applying for licenses from both TSA and FAA.
After that, they need to work with the Internal Revenue Service, the US Customs and Border Protection as well as the US National Transportation Safety Board for their approvals. Not yet, airlines also have to submit their flight schedules as well as their emergency evacuation plans and apply for operating permits to the aviation authorities of the destination states before being recognized for their capability and operating this route.
Besides all the above steps in administrative and legal process, the airlines need to invest in some specific aircraft that are qualified for this long-hour flight route. Specifically, the US authorities require that the aircraft must be dual-engined and have a minimum flight time of 180 minutes to be able to fly across the ocean to get to the US air borders. In addition, the airlines also need to spend quite plenty of time conducting sessions and training their flight teams to ensure that all the staff and cabin crews have sufficient knowledge, especially the US regulations, the Federal Laws and State Laws, before sending them on flights.
Moreover, the fact that two American airlines, Delta Air Lines and United Airlines, once established and then stopped operating the direct route between Vietnam and the US shows that this route is economically inefficient, taking years before earning ROI and making profit. At the moment, there are many other airlines that are operating this flight route with transit at extremely competitive prices. Therefore, any airline that wants to step into this aviation market has to announce a similar range of airfares. However, with huge investment costs in aircraft and training, selling the flight tickets too cheap will make it extremely long before the airlines can break even and start to make profit, let alone many years with great losses at the beginning.
The lemonade of Vietnam – US direct flight routes is undeniably sweet, especially when two major Vietnamese airlines are eyeing this market. However, realizing this dream is still as tough as nails since the airlines need to put the administrative, economic and technical challenges into serious consideration besides drooling over its enormous potential in order to sketch their investment and development schemes accordingly.