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Bamboo Airways launches flights in crowded Vietnam market

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Bamboo Airways flight attendants posing in front of their plane during a welcoming ceremony when it landed at Hanoi's Noi Bai airport on Jan 16.

Hanoi

BAMBOO Airways launched its long-delayed maiden commercial flight on Wednesday to become the fifth Vietnamese airline, heightening competition in the aviation sector of the South-east Asian nation which is emerging as a popular tourist destination.

The inaugural flight of the start-up airline, owned by property and leisure firm FLC Group, landed at Hanoi's Noi Bai airport at 08:30 local time after taking off from Ho Chi Minh City, Bamboo Airways said in a statement. It carried 180 passengers and five crew members.

The flight, which came after the launch date was postponed twice, would be welcome news for planemakers Boeing and Airbus, adding a measure of certainty to the airline's orderbook.

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Bamboo Airways signed a provisional deal in July to buy 20 Boeing 787-9 wide-body jets worth US$5.6 billion at list prices, and a memorandum of understanding in March with Airbus for up to 24 A320neo narrow-bodied aircraft.

The launch, though, comes at a time when aviation competition in the country is heating up and its aviation infrastructure is getting overloaded. Other local airlines operating are Vietnam Airlines, Jetstar Pacific Airlines, Vietjet Aviation and Vietnam Air Services Co.

Budget airlines Vietjet, which operates 60 Airbus jets, has quickly become the country's largest private airlines with affordable airfares for most of the country's 95 million population.

Trinh Van Quyet, chairman of Bamboo and FLC, underplayed concerns about competition and infrastructure.

"Bamboo will compete with other airlines with its service quality and other factors that other airlines don't have. We are not concerned about the constraints in aviation infrastructure in Vietnam, as the infrastructure keeps expanding rapidly and there haven't been any major congestions," he told Reuters.

He said in November that the airline will leverage on the parent's vast number of golf courses to draw in customers.

Bamboo Airways will operate eight domestic flights on Wednesday. It expects to fly on 37 domestic routes this year and also launch international flights to Asian countries, starting with Japan, South Korea and Singapore.

Mr Quyet said on Wednesday that there was no plan yet to list Bamboo Airways on the stock market.

Vietnam, one of Asia's fastest growing economies, has recorded double-digit expansion in domestic and inbound passenger numbers. The government aims to spur tourism with visa exemptions and by promoting investment in the industry.

The number of foreign arrivals in Vietnam reached a record high last year, rising 19.9 per cent to 15.5 million, according to the Government's General Statistics Office (GSO). Of the arrivals, 12.5 million came by air, up 14.4 per cent.

The GSO said that Vietnam's moves to offer e-visa for tourists from 40 countries and exempt visas for tourists from Eastern European countries have helped boost foreign arrivals.

Bamboo Airways said earlier that it would expand its fleet to 40-50 by the end of this year, despite regulatory restrictions and infrastructure constraints. REUTERS