Inadequacies still need to be resolved before Bamboo Airways' takeoff

By Ngoc Anh - Aug 08, 2018 | 08:29 AM GMT+7

TheLEADERThe number of airplanes ordered and purchased by Bamboo Airways is beyond the guidelines approved by the Prime Minister as well as the application for air transportation business license of the airline remains pending.

According to the recent appraisal of the Civil Aviation Administration of Vietnam (CAAV), Bamboo Airways is all prepared to ensure the availability of aircraft to meet the requirement of Article 6, Decree No. 92/2016/ND-CP regulatings the conditional business lines in the aviation sector.

In particular, the total investment capital of over $30 million, the minimum stipulated for a local airline, had been deposited by Bamboo Airways into a blockaded account of National Citizen Bank (NCB). 

"A dossier of application for an air transportation business license of Bamboo Airways is complete and valid, meeting the conditions on capital, ensuring the number of airplanes to assure a proper operation, the organizational apparatus and business plan and also guaranteeing appropriate operation and product development strategies," said Vo Huy Cuong, deputy director of CAAV.

Profuse inadequacies still remain in Bamboo Airways' application for air transportation business license
Vo Huy Cuong, deputy director of CAAV

Despite signing an agreement to purchase 24 A321NEO aircrafts with Airbus and a memorandum of understanding to acquire 20 Boeing 787-9 Dreamliner aircrafts, Bamboo Airways still had an agreement with CDB Aviation Lease Finance (Hong Kong) for a dry lease, a leasing arrangement whereby the aircraft financing entity provides three new A320 aircrafts for an eight year period without crew, ground staff.

At the same time, the agreement of Bamboo Airways to purchase 20 aircrafts from Boeing and the order of 24 Airbus is beyond the guidelines approved by the Prime Minister as well as the application for air transportation business license of Bamboo Airways remains pending.

Furthermore, since Bamboo Airways chose Phu Cat as their base airport therefore Bamboo Airways would have to send the aircrafts that park overnight to other capable airports if Phu Cat airport is not upgraded before 2021 to receive the Boeing 787-9 Dreamliner fleet. This is also contrary to Bamboo Airways' own proposal in the investment project.

In addition, although Vietnam Airlines is one of its direct competitors, Bamboo Airways is still going to employ Vietnam Airlines Engineering Company Limited (VAECO) and Vietnam Air Petrol Company Limited (SKYPEC), which are both owned by Vietnam Airlines, as its aircraft maintenance and engine maintenance units.

The dependence of maintenance services, logistics, ticketing agents, etc. will certainly influence to the operation of Bamboo Airways.

Even when Bamboo Airways is granted with air transportation business license, the airline will still need to attain the Aircraft Operator Certificate (AOC) in order to start flying, which is an approval granted by a national aviation authority (NAA) to an aircraft operator to allow it to use aircraft for commercial purposes. This requires the operator to have personnel, assets and system in place to ensure the safety of its employees and the general public.