Bamboo Airways just signed a formal contract with Airbus for the purchase of 24 aircraft but it has not yet obtained a business license in Vietnam. Does the company worry about the risk of not being licensed?
Dang Tat Thang: We have prepared for Bamboo Airways for two years and I think that this is not risky. The licensing procedures for Bamboo Airway have come to the end.
With the vison of "opening the sky" and the orientation of developing tourism as a key economic sector, we believe that Bamboo Airways will be supported.
However, the government said that there would be the limitation on issuing new business licenses due to overload at Vietnamese airports, especially Tan Son Nhat. Does this issue limit the ability of Bamboo Airways to operate?
Dang Tat Thang: In the scheme submitted to the government, we clarify that Bamboo Airways focuses mainly on niche markets which are underdeveloped markets but have a lot of potential.
The main objective of Bamboo Airways is to transport domestic and international tourists to FLC resort destinations and others of Vietnam.
The domestic routes which directly connect to tourist destinations such as Thanh Hoa - Quy Nhon, Thanh Hoa - Phu Quoc, Thanh Hoa - Nha Trang or Hai Phong - Quy Nhon will certainly reduce pressure on infrastructure for Noi Bai and Tan Son Nhat airports.
Under the pressure of overload at Tan Son Nhat airport, the government had solutions. The project of expanding Tan Son Nhat airport and increasing its capactity by 40 per cent to 50 per cent was set up.
In addition, with the capacity nearly doubling Tan Son Nhat's when it is in operation, Long Thanh airport also helps a lot and it will become the main point of international routes.
As you said before, the goal of Bamboo Airway is mainly for tourism activities to the FLC resorts so do you think 24 aircraft seems to be too much?
Dang Tat Thang: By 2030, Bamboo Airways plans to open 24 domestic routes and 16 international routes and with this plan, 24 aircraft received from Airbus in the period 2022-2025 are not enough.
Six resort destinations that came into operation and have a large number of visitors will contribute to ensure the potential utilization rate for Bamboo Airways and it still does not to mention others that are planned to be developed in future.
Looking at other countries in the region, we find out the fact that Taiwan has only 30 million people but there are three airlines developed, South Korea has more than 50 million people and four airlines operated and Thailand has more than 60 million people but has over ten ones.
That means there are still a lot of opportunities in Vietnam market when it has nearly 100 million people but has only three airlines. If there are two other airlines licensed, it is still not enough.
Bamboo Airways' long-term plan will certainly need a lot of capital to make. With the current chartered capital of $30.8 million, where does Bamboo Airways expect to raise fund to buy 24 aircraft in the near future?
Dang Tat Thang: Bamboo Airways is a subsidiary of FLC Group so FLC committed to providing financial support for Bamboo Airways during its initial years of operation, including deposits and installment for buying aircraft.
In the long run, we have been working with many partners and received the attention from a number of credit institutions and financial funds in Vietnam and other countries.