70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Investment
How hard is it for Vietnamese air carriers to fly to the US?
Ha An 11:51, 2019/09/17
As if meeting technical requirements to fly to the US is not hard enough, Vietnam Airlines has to ensure the profitability of those flights.
Vietnam Airlines, the country's national flag carrier, is having a headache to make non-stop flights to the US profitable, Thanh Nien newspaper reported. 
 
Illustrative photo.
Illustrative photo.
As if meeting technical requirements to fly to the US is not hard enough, the air carrier has to ensure the profitability of those flights. Practices from major world air carriers have shown that they have to compensate for the losses incurred by the US route with earnings from other lucrative ones or from sales and leaseback. 

Vietnam Airlines estimated that three to five flights per week to the US would result in a loss of between US$30-50 million per year (according to the exchange rate of 10 years ago) for the carrier. Sources from Boeing also said that 90% of air routes from Asia to the West Coast of the United States cannot earn a profit and must be relieved by those to the US’ East Coast. However, most of the potential clients of Vietnam Airlines are Vietnamese Americans who live in the West Coast. 

According to an aviation expert, it will take Vietnam Airlines five years to penetrate the US aviation market while the investments in advertisement and security are huge. 

At present, the average ticket price of a mid-range air carrier for the Vietnam-US route is around US$800-900 while that of the five-star air carrier is approximately US$1,100 – US$1,200. 

As a result, Vietnamese air carriers plan to sell ticket at prices of under US$1,200. However, the prices are estimated not enough for loss relief. 

Recently, Vietnam Airlines has been the first carrier in Vietnam to secure a coveted license to launch flights from Hanoi and the southern business hub Ho Chi Minh City to Los Angeles, San Francisco, New York, Seattle, and Dallas. 

The terms, which came into effect on August 26, cover air transportation of persons, property, and mail between the Vietnamese and North American cities.

This is considered a significant move for the air carrier to prepare its plan to launch the direct flights to the US in the future.
Other news
16:36, 2024/04/29
Over US$4.6 billion poured into Vietnamese startups in past decade
Technological innovation has become an important factor driving Vietnam's sustainable economic development amid the uncertain global economic issues.
19:59, 2024/04/23
Nvidia, FPT invest US$200 million in AI factory
Nvidia will help local businesses in accelerate digital transformation and make Vietnam an AI powerhouse.
22:24, 2024/04/22
Vietnam starts construction of US$432 million expressway to China
The expressway will stimulate socio-economic development in four major economic zones in Vietnam: the northern, central, southern, and Mekong Delta regions.
12:23, 2024/04/08
US-based Rosen Partner to invest in world-class entertainment complex projects in Vietnam
The project is expected to crystallize and showcase Vietnam's unique cultural values to the world.
16:32, 2024/04/04
Vietnam among top investment destinations for SEA investors
The top three neighboring countries whose companies are eager to expand their operations in Vietnam are Thailand (66%), Malaysia (58%), and Indonesia (55%).
13:47, 2024/04/01
Vietnam, China intensify cooperation on green growth, digital economy
The scope of cooperation includes not only investment but also technology transfer, employee training, and the exploration of other markets.