While analyzing the progress made by Vietnam over the last 20 years it is very hard not to be impressed. This communist country is bravely marching towards becoming one of the leading powers in region, developing in terms of trade, economy, tourism and much more. The country has a population of almost 92 million which situates it on the 13th place in the World and covers around 333 thousands square kilometers.
In the last 20 years Vietnam’s economy grew on average by almost 7% annually. Last year it was around 6% and in 2015 and 2016 should be around 6,2%. Young people are being a big asset of the country. Median age is 29 and over 70% of the population is between 15 and 65. This shows that the majority of the people are in the working age (around 53 million) which is healthy for the economy and development. Vietnam, once a rural country, has shifted for services and manufacturing. The latter is the biggest and constitutes 40% of the economy. Vietnam is shipping mainly mobile phones and parts (17% of the total export), garments (14%), crude oil (6%) and rice (2%). Goods are being transported most often to USA (17% of the export), China (11%), Japan (11%), EU(18%) and ASEAN (15%). What is also important the unemployment rate is at the 2,5% level, which is higher than in last years but still very low.
Apart from the economy, Vietnam is additionally very attractive tourist destinations. In 2014 almost 8 million international travelers visited the country. Most numerous were Chinese (around 2 million), South Koreans and Japanese. Since 2009 (3,8 million visitors) the international tourist arrivals market has been growing at a pace of almost 16% yearly (CAGR). However, is worth mentioning that the dynamic is weaker in the last couple of years. In 2014 it was only 4%, which was caused mainly by Russia’s economic problems and territorial disputes with China. Those two factors constrain the double digit growth.
The most frequently visited places in the country were: the biggest city in the country Ho Chi Minh (4,4 million visitors in 2014), capital Hanoi (3 million), coastal Da Nang (around 1 million) and Nha Trang (0,9 million). Ho Chi Minh has population of 13 million people and is an economic center of Vietnam.
7 million Hanoi is the political center of the country, has a rich and long-standing tradition and culture as well as being the one of the fastest growing cities in the region.
Da Nang is the most important city in the central Vietnam, being a famous port as well as gateway to many leisure destinations and cultural heritage sites.
Nha Trang is well known by its beautiful beaches, seaside and coral seabed.
There are only 3 noteworthy airlines which are registered in Vietnam. The national carrier and the biggest among of them is Vietnam Airlines (VN) which carried slightly less than 15 million passengers in 2013 and was expected to reach almost 16 million passengers in 2014.
It has its hubs both in Hanoi (HAN) and Ho Chi Minh (SNG). Vietjet, the second largest airline, is significantly smaller and focused only on short to medium haul flying within the region.
During 3 years of operation (till 31st of January 2015) it transported 10 million passengers, including around 6 million only in 2014. The smallest among those three is Jetstar Pacific Airlines. In fiscal year 2014 it has transported 2,2 million passengers and is co-owned by Vietnam Airlines (70%) and Jetstar (30%).
Vietnam Airlines is a legacy carrier and the other two are low cost airlines.
As I mentioned earlier the aviation in Vietnam is growing and all 3 key players are expanding its networks and fleets. This leads to increasing traffic also at country’s airports which are also forced to develop and update its strategies. The biggest airport in the country is Tan Son Nhat International Airport (SGN) which hosted 22 million passengers in 2014.
After ongoing expansion, the capacity will grow to 25 million. The development options are limited as the airport is tightly surrounded by buildings and sprawls being located near to the city center. Second biggest airport in Vietnam is Noi Bai International Airport (HAN) in Hanoi. Its capacity boosted after the new Terminal 2 has been completed in the beginning of 2015. Currently Terminal 1 and 2 combined are able to handle around 19 million passengers per year. In 2013 it was 13 million and in 2014 around 14 million.
HAN has much larger growth potential then SGN, securing enough land for further expansion and will have a support from other capital airport called Gia Lam Airport which most likely becomes civil airport in 2015. Da Nang International Airport (DAD) is another example of impressive expansion. In 2014 it handled 5 million passengers. This happened many years before it was initially planned. As I mentioned the the city is the gateway for Central Vietnam and popular leisure destination. The authorities are thinking about increasing the capacity of the airport to 10 million till 2020. The fourth busiest airport in Vietnam is Cam Ranh International Airport (CXR) serving the city of Nga Trang. In 2013 it handled around 1,5 million passengers.
This month is very important time in Vietnam aviation history. The couple of milestones has been finally reached and the country is on everyone’s lips, focusing the attention of whole industry. Despite being one of the world’s fastest growing aviation markets, Vietnam announced coming into possession of two most modern airplanes available and additionally have impressive plans for new airport in Ho Chi Minh.
Vietnam Airlines is taking delivery for Airbus A350-900
Airbus A350-900 is the new, state-of-the-art airplane which was developed to replace A330/340 family. Initially A350 was envisioned to be a just updated version of Airbus A330 but due to massive interest in Boeing 787, European manufacturer was forced to change this plans and present customers radically new plane with bold and innovative design. The new model was ultimately called Airbus A350 XWB, which refers to aircraft’s “eXtra Wide Body”. This becomes the main competitive advantage over its American rival. Airbus intended to design 3 different variants of this plane. Version dubbed -900 becomes a bestseller of the range and the clients ordered almost 600 of it. The -800 version has been abandoned just after the new A330neo was announced. In the forthcoming future then the A350 family will comprise of only two members A359 and A350-1000, the stretched variant of Airbus newest machine. Vietnam Airlines has just received its first Airbus A350-900 and becomes a second operator of this aircraft (after Qatar Airways).
The plane is more conservative in terms of design comparing to Dreamliner. Airbus decided to rely on engines and nickel-cadmium batteries instead of using unproven lithium batteries chosen by the Boeing while designing electrical system. More conventional approach enables to certify the plane faster and more smoothly. Airbus, however plans to add Lithium batteries, most likely in 2016. More then a half of A350 airframe is made out of composites. The plane has larger windows, wider cabin, higher pressure inside, is very fuel efficient and surprisingly silent. Vietnam will receive 14 of those amazing aircrafts. The first one is configured in 3 class layout with 29 seats in Business Class, 45 in Premium Economy and 231 is Economy. Initially the plane will operate between Hanoi and Ho Chi Minh to gain experience and from October 2015 it will be used on long haul Hanoi – Paris route. This will be an important boost for the brand image of the company and the country.
787 will arrive shortly
Delivery of A350 is not the only big news for Vietnam national carrier. Later this month the airline will finally get its first Boeing 787-9. It will be the first of 19 Dreamliner which will join the VN fleet in the next couple of years. Boeing 787-9 is considered to be the most modern airplane in the world. Its design was so bold it causes a big problems and delays at development stage. Right now, luckily all those issues are solved and American manufacturer may finally benefit from the taken risk, delivering the aircraft which is praised by the airlines for its efficiency and cutting edge design.
VN supposes to be the 8th airline to get 787-9 after Japan Airlines, ANA, Air New Zealand, United Airways, Virgin Atlantic, Etihad and LAN. It will be configured in 2 or 3 class layout and will be initially deployed on the route between Hanoi and Ho Chi Minh. Later the plane will start flying to Europe, where London will be its first destination and Frankfurt will follow. Alike A350, Dreamliner will become a flagship of the aviation in Vietnam and the flying promotion of the country showcasing the strength of the nation. The benefits of the Dreamliner I have presented in one of my previous articles.
Gargantuan airport to be built in Ho Chi Minh City
Among new gigantic airports projects like Al Maktoum International Airport in Dubai, Beijing Daxing International Airport or Istanbul New Airport, Long Thanh International Airport in Ho Chi Minh is less known. After the long discussion and hesitation, the construction of new airport for Ho Chi Minh was finally approved. It should unburden the congested Tan Son Nhat airport which each year is working at its capacity limits and has only a little room for further growth. This will be a clean sheet project envisioned for as much as 100 million passengers. The authorities selected the land approximately 45 kilometers northeast of Ho Chi Minh which will guarantee the unfettered development and dodge the possible inhabitants’ protests. The plan of construction was approved by authorities in the end of 2014 but now the additional decisions regarding financing and schedule were made. The ground works most likely won’t start until 2019 and the airport should reach its full capacity in 2035, costing around 19 billion USD. The project made by ADPI and JAC (Japan Airport Consultants) envisages that after completion of the first phase (around 2023) the airport will be able to handle 25 million passengers. Long Thanh will be mainly focused on international flights while SGN will become domestic airport. The final shape of this investment may change in the next months but I am sure that Vietnam will use all its strength to complete the project and set the seal on great economic progress which accomplished during the last 20 years.