Bamboo Airways launched its flights to Vietnam in 2019 with great fanfare. With the promise of becoming a serious competitor to the national carrier Vietnam Airlines. 4 years later, the dream has been shattered by the realities of an Asian air transport industry that is still finding its feet since the Covid crisis.
Asian recovery confirmed, but only for major carriers
Admittedly, passenger traffic has picked up strongly over the past year. According to the Asia Pacific Airline Association AAPA, the total number of passengers between January and August 2023 reached 171.4 million. 51.6 million for the same period in 2022, i.e. an increase of 232%.
But this recovery seems to be benefiting established carriers - national airlines or major private carriers such as Eva Air or AirAsia. New entrants - i.e. airlines that have only been in business for 5 years - remain fragile. Rising operating costs, inflation, disruption to the supply chain and the absence of Chinese and Japanese tourists are weighing heavily on their financial equilibrium.
According to AAPA, in August 2023, passenger traffic for its forty members based in Asia Pacific remained 22% lower than in the pre-Covid period.. And this despite the upturn in demand.
This explains the difficulties faced by several carriers. At the beginning of October, the Malaysian low-cost carrier MYAirline, born in 2022, had to suspend operations. With no prospect of recovery. It is now Bamboo Airways in Vietnam plunges into turmoil.
Uncertainties over ownership and the network
In 2022, the company had to look for new shareholders after its founder and chairman of the FLC group was arrested for fraud and stock market manipulation. The arrival of a new owner in June 2023 with the support of a local bank actually translates into a complete change of strategy. There had been rumours that the company might seek bankruptcy protection.
In a statement, Bamboo Airways said restructure around a short- and medium-haul fleet. It will return the three Boeing 787s to their lessors and keep only its 22 Airbus A320s and A321s.
The company suspends its European routes from 25 October. The company launched its Frankfurt and London Gatwick at a rate of two weekly flights departing from Hanoi. Same destiny for lines on Melbourne and Sydney.
Only the domestic network -with around ten destinations- and flights to Tokyo and Taipei. The company says it also wants to expand into South-East Asia which it does not currently serve. Except that Bamboo Airways is arriving a little late on a market already saturated by Vietnam AirlinesVietjet and all the other low-cost and national airlines...
