Vietnam Airlines is studying the resumption of service to the USA as early as next year.
In a remarkably candid interview, CEO Duong Tri Thanh told CNBC that the state-run carrier doesn’t expect to make money on the route, but has other reasons for expanding unprofitable longhaul service.
The philosophy of the company is to help the economy and try to be viable and profitable. But growing the economy is more of a mandate. You can see on most of the intercontinental routes we are not making money. But we are helping to get people in and out.
That’s not a surprising revelation, but refreshing in its honesty. Often, CEOs and PR teams refuse to concede that their carrier will lose money but have goals beyond profit. I hope SkyTeam partner Delta will be ready to protest…
The Competition
Think about the competitive landscape Vietnam Airlines faces. Singapore Airlines will start nonstop service to Los Angeles and New York again this year. Malaysia Airlines, Garuda Indonesia, and Thai Airways are also considering new service to the USA. Philippines Airlines already flies nonstop to Vancouver and Los Angeles and Mainland Chinese carriers are quickly adding flights to the USA.
The fact is, the Southeast Asian market is already oversaturated and Vietnam Airlines doesn’t have all that much to offer that will distinguish it from others. Furthermore, with strict visa requirements and dated facilities, Ho Chi Minh City or Hanoi are not ideal transit points for secondary cities in Asia.
While there are 2,000,000 Vietnamese-Americans living in the USA, Thanh is not blind to the uphill battle.
The plan is the end of 2019. But if it is not feasible and it is too much we have to wait to find a way to work with partners to improve the traffic mix. Like most of the airlines, like Philippines and Thai, we don’t have enough business travelers. We are just dependent on visiting friends and relatives. That is no way to make money.
CONCLUSION
I recently flew the Vietnam Airlines A350 from Ho Chi Minh City to Frankfurt, a good flight but not a great flight. If Vietnam Airlines wants to compete for business travelers, it will also need a more competitive product.
> Read More: First Impressions of Vietnam Airlines A350 Business Class
image: Русский / Wikimedia Commons
What strict visa requirements are you hinting at? Asean travellers can go in and out as they please, Europeans have e-visa facilities.
I would have no issue travelling through Vietnam if such would be the most logical routing.
An annoying visa on arrival policy for U.S. citizens.
Oic. Might have something to do with all the bombs and napalm you guys popped in over there in the 60’s and 70’s in your war on communism. Maybe the Vietnamese didn’t like it that much so they make it a little more troublesome now for americans.
I wasn’t aware you guys got special treatment at immigration there but if that’s the reason I get the point.
I think you mean 2,000,000 Vietnamese-Americans. Vietnamese citizens are people who hold Vietnamese citizenship. Most of the Vietnamese community in the United States came from (now defunct) South Vietnam after the war.
I understand your point and debated it when writing. But that 2MN number comes from the CNBC article I linked to.
They are too small for the big 3 to make a big fuss about, but it is interesting that they openly admit it. The big 3 clearly have a valid case on this subject, so unlike most bloggers, I don’t villify them for trying to protect themselves. However, as a free market advocate I believe if a country is willing to offer you a product/service below cost(either through subsidies or currency manipulation), it is in our nation’s best interest to accept their offer.
There are not 2 million Vietnamese CITIZENS living in the US. They are of Vietnamese origin !
Viet Kieu or Vietnamese sojourner. About 400,000 in Southern California
I can understand of the prestige of the flag carrier at LAX, however they can also serve traffic via Seoul in connection with Korean and Delta
Ps delta can’t complain. They are a SkyTeam partner and Air France has a join venture with Vietnam from/to Paris
There are not 2 million Vietnamese citizens in the US. There are 2 million people of Vietnamese descent living in the US, the vast majority of them (>85%) are US citizens.