Vietnamese start-up airline Bamboo Airways aims to take delivery in Vietnam of its first Boeing 787-9 Dreamliner on December 22 to coincide with an investor briefing the airline has planned at a luxury resort in the coastal province of Quang Ninh, Business Traveller Asia-Pacific understands.
Bamboo Airways is set to first take delivery of the aircraft in Seattle, where Boeing has a delivery centre, on December 9, then later the aircraft will make its way to Vietnam.
“We have to ask for the slots to fly it to Vietnam. It really takes time, so it’ll arrive in Vietnam on December 22,” said a source with knowledge of the delivery who asked not to be named.
Aircraft delivery is a complex process and dates tend to be subject to change, so there is a chance the aircraft will deliver on a different date to December 22. The source said December 22 is a “tentative” date.
Reuters reported yesterday that the aircraft would deliver on December 22, citing comments made by the airline’s vice chairman Dang Tat Thang at a press conference.
The airline is planning to hold an investor summit called “Potential & Investment Opportunities of Bamboo Airways” at FLC Ha Long Bay Golf & Luxury Resort (Quang Ninh). FLC Group owns Bamboo Airways.
The source said Bamboo Airways is trying to coordinate the delivery of the aircraft to be on the same day as the airline’s investor day.
Invited to the event will be leading experts in the field of transportation, finance and securities, as well as strategic partners, investors, and domestic and international news agencies. The source said investors from the US and Japan would targeted.
Bamboo Airways said in a press release that “loyal customers” will also be invited to the event. The source said which customers get to attend would be decided on a case by case basis.
The airline expects the aircraft to fly initially on domestic routes such as Hanoi-Ho Chi Minh City and Hanoi/Ho Chi Minh City-Da Nang. Later, the aircraft will be flown on international routes to Asia, Europe, the Americas, as well as to Japan, Korea, China, the Czech Republic and Australia.
Bamboo Airways has made ambitious statements about its route plans, including telling the Financial Times it intends to fly to the US using a leased Airbus A380 superjumbo. However, in early August, a company source Business Traveller Asia-Pacific spoke to sought to downplay those comments.
The airline added in its press release that its fleet is expected to reach 30 aircraft by the end of this year. The overall fleet goal appears to have shifted, as the airline said earlier this year in a press release that it was targeting a fleet of 40 by year-end. Such an adjustment would not be uncommon for an airline in its start-up phase.
Bamboo’s orderbook
In mid-June 2018, the airline firmed up an order with Boeing for 20 787 Dreamliners. At the time, Boeing said the aircraft were “tentatively scheduled to deliver” deliver from April 2020 through 2021. Business Traveller Asia-Pacific understands that the delivery schedule was changed to deliver the aircraft earlier.
In February 2019, Bamboo Airways signed a deal on the sidelines of the summit meeting between US President Donald Trump and North Korean leader Kim Jong-un for an additional 10 787 Dreamliners, increasing its total orderbook for the aircraft to 30 units.
Bamboo Airways also has orders with Boeing’s rival Airbus for up to 24 A321neo aircraft. In March 2018, Bamboo Airways’ parent company FLC Group signed a memorandum of understanding (MoU) with Airbus for the aircraft. Airbus said at the time that Bamboo would take delivery of aircraft from third-party aircraft leasing companies (also known as lessors) in 2019, before taking delivery of the aircraft from Airbus.
Australian ambitions
Business Traveller Asia-Pacific reported last week that Bamboo Airways is planning to fly to Melbourne with a Boeing 787-9 Dreamliner by the second quarter of 2020 and hopes that opening that route will pave the way for it to launch services to more Australian destinations in future.
On October 22, Bamboo Airways signed an agreement to receive two B787-9 Dreamliners from GE Capital Aviation Services (GECAS), one of the biggest aircraft leasing companies in the world. The first of these GECAS aircraft is expected to deliver in late December or January, the Bamboo Airways source said.
A group of Bamboo Airways staff have been in Singapore (where the aircraft is now) since November working on aircraft delivery. The first one will arrive in Vietnam in December and the second is expected to arrive in late December or early January, Business Traveller Asia-Pacific understands. These aircraft are separate to the one Bamboo Airways hopes to bring over from Seattle for December 22 and to coincide with the investor briefing.
New investment
Bamboo Airways is just one of several start-up airlines trying to take advantage of the growing air travel demand in the Asia-Pacific region.
Airlines require huge amounts of capital and the start-up phase is an especially crucial period for their businesses. The planned investor seminar on December 22 could be a good opportunity for Bamboo Airways to raise funds to support its expansion, according to a Shanghai-based aviation expert.
“Start-up airlines require significant capital expenditure, especially for quick expansion, such as the case with Bamboo,” says David Yu, professor of finance at New York University Shanghai and chairman of China Aviation Valuation Advisors.
“They have placed significant orders with Boeing and will need financing support both in terms of equity as well as debt for these future acquisitions. While they have a strong cornerstone backer with FLC Group, they will look for other means to diversify their funding as they continue to accept new aircraft and expand their routes.”
Yu added: “Having the delivery coincide with the investor day would be a good way to show investors that the airline is capable of taking successful delivery of a new generation wide-body and give confidence to those investors in the airline.”
Bamboo’s background
Bamboo Airways was established in 2017 and officially began operations in January 2019 out of Hanoi.
“The airline is exploiting 30 domestic and international routes to Japan, Korea and China (Taiwan and Macao). It is expected that in 2019, the airline will expand its network to 37-40 routes, including international routes to Taiwan (China) and Southeast Asia,” the airline said.
“Up to now, Bamboo Airways has carried over 2 million passengers with more than 16,000 absolutely safe flights and the load-factor rate of above 90%. Moreover, Bamboo Airways is the most on-time airline in the whole Vietnamese aviation industry with an average OTP [on time performance] rate of 93.9% during the first 11 months of 2019.”
You can read more about the start-up companies emerging in Vietnam’s dynamic capital Hanoi in our recent report on the city here:
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