Friday , June 21 2024

How Bamboo Airways plans to soar under new management


Property developer Him Lam, the new owner of Bamboo Airways, plans to build an aviation ecosystem centered around the latter while expanding its presence in Asia.

Bamboo Airways began flying in 2019 and became the first private carrier to operate wide-body aircraft.

It quickly expanded its fleet to nearly 30 by the end of 2021 when it held a 20% share of the domestic market and also flew on some international routes.

But the arrest of its key leaders, including chairman Trinh Van Quyet, for alleged stock market manipulation came as a death blow.

Him Lam, a south-based developer of condos and a hotel management service provider, took over Bamboo this year.

A new leadership has been appointed this week to hopefully begin a new chapter.

“The last five years have been a journey of establishing a brand for the airline,” deputy chairman Nguyen Ngoc Trong said at the company’s annual general meeting on June 21.

“In the next five years Bamboo Airways will focus on developing efficiency and professionalism.”

CEO Nguyen Minh Hai said the company seeks to achieve breakeven by next year to turn profitable by 2025.

Expanding its services to increase revenues is therefore one of its main focuses.

Revenues soared by 3.3 times last year to over VND11.7 trillion, but the airline still could not break even.

Hai said a larger fleet is imperative for doing this. The current fleet of 30 aircraft needs to be expanded by eight to 10 a year until 2026, and each aircraft needs to operate more than the current 10 hours a day, he explained.

Reducing costs is another key task.

The airline plans to do this by establishing its own subsidiaries to handle cargo, technology, ground services, catering, fuel, and training, something that Vietnam Airlines and Vietjet have been doing over the years.

Bamboo Airways’ cargo unit started operating on Jan 1 and its other subsidiaries are scheduled to be launched in September.

Him Lam Land, a subsidiary of Him Lam, recently became a shareholder of Saigon Ground Services, which accounts for the majority of logistics services at Tan Son Nhat International Airport in HCMC and some other airports.

But Him Lam chairman Duong Cong Minh has an even bigger vision for the airline: making it a key player in Asia.

To do this by speeding up expansion, Minh has turned to some former Japan Airlines executives. One of them, Oshima Hideki, the former deputy CEO of Japan Airlines, has taken over as chairman of Bamboo.

“The Japanese experts will help Bamboo Airways participate in aviation alliances and partner with global brands,” Hai said.

The airline also wants to list its shares on a Vietnam stock market by the end of 2026.

But there are challenges the airline has to overcome to achieve its dreams.

One of them is acquiring jets. With global aviation demand starting to recover since last year, there is an aircraft shortage and their prices have gone up.

Bamboo Airways will also have to compete with other carriers to get flight slots at both domestic and international airports.

Hai cited the example of Beijing Capital International Airport, which has given Bamboo only night slots, and could take one or two more years to give it day slots.

Domestically, Vietnam Airlines accounts for around 64% of prime flight hours on the ultra busy Hanoi – HCMC route and Bamboo for only 10%.

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