Vietnam Airlines could add capacity to Australia in 2019 as it takes delivery of 787-10 aircraft.
- Vietnam Airlines intends to use its future fleet of 787-10s on Australia and North Asia routes;
- Vietnam Airlines plans to take its first 787-10 in 2019 and has not yet decided whether to include a premium economy cabin;
- Vietnam Airlines currently operates 17 weekly flights to Australia with all flights using 787-9s in three class configuration including premium economy;
- Deploying 787-9s to Australia would enable Vietnam Airlines to increase capacity and reduce unit costs, therefore improving its ability to compete with Jetstar in the Australia-Vietnam market.
Vietnam Airlines EVP Le Hong Ha told CAPA TV the airline plans to use its future fleet of 787-10s to Australia and North Asia, particularly Japan and South Korea. Vietnam Airlines has eight 787-10s on order for delivery from 2019.
Vietnam Airlines currently operates 17 weekly flights to Australia, including seven from Melbourne to Ho Chi Minh, seven from Sydney to Ho Chi Minh and three from Sydney to Hanoi. All 17 flights are operated with 274 seat 787-9s in three-class configuration (economy, premium economy and business class).
Vietnam Airlines operates 11 787-9s, which were delivered from mid 2015 to early 2017. In addition to Australia, the airline currently uses the 787-9 fleet to operate long haul flights to Frankfurt and London, regional flights to Beijing, Osaka, Shanghai and Tokyo and some domestic flights on the Ho Chi Minh-Hanoi trunk route. The airline generally uses a higher density 311-seat two class (economy and business) configuration on the regional routes.
The 787-10s provide Vietnam Airlines an opportunity to add capacity on Australia and North Asia routes which are now operated with smaller 787-9s. The 787-10, which will enter service in 2018 with launch customer Singapore Airlines, has not been developed for long haul routes.
Mr Ha said Vietnam Airlines has not yet decided on a configuration for the 787-10, adding that the airline is debating internally whether to include premium economy.
Using higher density widebody aircraft to Australia and North Asia is sensible as it would reduce Vietnam Airlines’ unit costs on routes that have become extremely competitive, particularly from LCCs.
Jetstar Airways launched services from Melbourne and Sydney to Ho Chi Minh in May-2017, providing new LCC competition in the Australia-Vietnam market. Jetstar operates 335-seat 787-8s on Australia-Vietnam routes. The 787-10 will give Vietnam Airlines more seats per flight than Jetstar while maintaining a larger premium cabin. This should enable the unit cost gap between Vietnam Airlines and Jetstar to narrow, which is an important consideration in a price sensitive market such as Australia-Vietnam.
Vietnam Airlines is also facing intensifying competition on Vietnam-North Asia routes due to rapid expansion of Vietnamese LCC VietJet and new services into Vietnam from North Asian LCCs. The 787-10 along with the A321neos that Vietnam Airlines will take delivery of from 2018 should enable Vietnam Airlines to better compete from a unit cost perspective with Asian LCCs.