Vietnam Airlines () is the flag carrier of Vietnam. The airline was founded in 1956 and later established as a state-owned enterprise in April 1989. Vietnam Airlines is headquartered in Long Biên district, Hanoi, with hubs at Noi Bai International Airport in Hanoi and Tan Son Nhat International Airport in Ho Chi Minh City. The airline flies 117 routes across 19 countries, excluding codeshared services.
From its inception until the early 1990s, Vietnam Airlines was a minor carrier within the aviation industry as it was hampered by a variety of factors including the socio-economic and political situation of the country. With the government's normalization of relations with the United States, the airline could expand, improve its products and services, and modernize its ageing fleet. In 1996, the Vietnamese government brought together 20 service companies to form Vietnam Airlines Corporation, with the airline itself as the centrepiece. In 2010, the corporation was restructured into a limited liability company and renamed Vietnam Airlines Company Limited. A seven-seat management board, appointed by the Vietnamese Prime Minister, oversees the company.
As passenger transport constitutes its core activity, Vietnam Airlines plays a crucial role in the economic development of the country. It owns 100% of Vietnam Air Service Company – a regional airline in southern Vietnam and almost 99% of the low-cost carrier Pacific Airlines. In addition, the corporation earns revenue from airline catering and the maintenance and overhauling of aircraft through a number of its subsidiaries, including Vietnam Airlines Engineering Company and Vietnam Airlines Caterers. The company has also diversified its investments in the aircraft-leasing and airport ground-servicing industries, and is looking to manufacture aircraft components. It controls and operates a cargo division, Vietnam Airlines Cargo.
Vietnam Airlines became a member of SkyTeam in June 2010, making it the first Southeast Asian carrier to have joined that alliance. the State's stake in Vietnam Airlines is 86.34% and All Nippon Airways holds 5.62%, being a strategic shareholder of the national flag carrier.
History Beginnings
Vietnam Airlines has its origins in January 1956, when it was established by the North Vietnamese government under the name Vietnam Civil Aviation () following the nationalization of Gia Lam Airport. It was instituted after the government signed Decree No. 666/TTg. Under the designation 919th Transport Air Force Regiment (), the airline was created as part of the air force for civilian purposes with support from both the Soviet Union and China; initially, its fleet consisted of two Lisunov Li-2s that were later replaced by two Ilyushin Il-14 and three Aero Ae-45s. This was due to an embargo that prohibited the airline from leasing and/or buying American technology or components.
The airline's development and expansion was seriously hampered by the Vietnam War (1955–1975). Following the war, its first international destination was Beijing, followed by Vientiane in 1976. During that year, the airline was known as General Department of Civil Aviation in Vietnam, and began full operations; it carried around 21,000 passengers, one-third of whom were on international flights, and of cargo. In 1978, another important destination of Vietnam Airlines was added, with flights offered to Bangkok. The late 1980s and early 1990s saw the expansion of the network to Hong Kong, Kuala Lumpur, Manila and Singapore.
In 1990, the company initiated discussions regarding the incorporation of Western-built aircraft into the fleet. Later that year, however, the carrier had to cancel the acquisition of two Airbus A310s due to their use of US-manufactured engines. By July 1991, the airline struck a wet-lease agreement with Dutch lessor TransAvia. The aircraft involved was a Boeing 737-300, that arrived in Vietnam Airlines' livery. However, the aircraft was returned after the US State Department pressured the Dutch lessor to remove the aircraft from Vietnam. Subsequently, Vietnam Airlines organized a similar but more complicated deal with TEA Basle, who spent the rest of 1991 negotiating a deal with US authorities. Eventually, a solution stating that "[the Boeing 737] must be positioned outside Vietnam, with no logo or lettering of Vietnam Airlines. On these conditions, it could operate on behalf of Vietnam Airlines" was reached. In December 1991, Cathay Pacific and Vietnam Airlines agreed on a 50–50 joint venture to operate between Hong Kong and Vietnam, as the airline's Tupolev Tu-134 fleet did not meet Kai Tak Airport's noise restrictions.
In October 1992, the Boeing 737 was supplemented with an Airbus A310. However, a dispute with Bulgarian Jes Air over who should pay for the repairs after the aircraft sustained an engine failure led to its replacement with another A310 from GATX, also operated by Jes Air. A similar dispute with United Technologies encouraged the airline to switch from Airbus to Boeing. Hence, a Boeing 767-200ER, leased from Ansett Worldwide Aviation Services (AWAS), arrived in January 1993, and a Royal Brunei Airlines Boeing 767-300ER, arrived the following year. In October 1993, the first Airbus A320-200 was incorporated over a two-year wet-lease contract with Air France. Vietnam Airlines by now had started discussions with Air France about a partnership, and the French carrier agreed to lease its Airbuses to Vietnam Airlines, and also to provide customer support and pilot/crew training. By that time the route network had further expanded internationally, seeing the incorporation of destinations such as Paris, Tokyo, Seoul, Taipei, Sydney, and Melbourne. In 1993, the airline carried 1.06 million passengers, 418,000 of whom were on international flights.
New enterprise: 1993–2006
The airline became the flag carrier of Vietnam in 1993, after having completed a restructuring programme that was started four years earlier. In that year, the airline split from the Civil Aviation Administration of Vietnam (CAAV) and became a state enterprise. The move was similar to the reorganization of the Chinese CAAC Airlines into several regional airlines in 1987. Even though the airline gained some independence from the CAAV, it was still known as Civil Aviation Administration of Vietnam within the 1993–1996 period. Also from 1993 to 1995, the 919th Air Force Regiment was eventually re-established as the Flight Crew Division 919 () - the designation that is still being used by the Vietnam Airlines and its personnel until today - marking the carrier's full transformation from a nominal military unit into a wholly civilian and commercial operator.
In February 1994, US President Bill Clinton lifted the trade embargo to allow Vietnam Airlines the ability to acquire Western-built aircraft. Consequently, Vietnam Airlines announced in April of the same year that it would be phasing out its inefficient Soviet planes. By April 1995, the fleet consisted of Airbus A320s (all of them leased from Air France), Antonov An-24s, ATR 72s, Boeing 707-300s, Ilyushin Il-18s, Tupolev Tu-134s and Yakovlev Yak-40s; at this time the route network comprised domestic destinations (including Ban Me Thuot, Da Nang, Dien Bien Phu, Hue, Nha Trang, Phu Quoc and Pleiku) and international destinations (including Bangkok, Hong Kong, Kuala Lumpur and Singapore). On , the airline, along with a number of other aviation-related businesses, were incorporated to establish Vietnam Airlines Corporation. Two Fokker 70s were purchased in mid 1995 for million; they were aimed at partly replacing the Tupolev Tu-134 fleet on domestic routes as well as at serving as VIP transport. In December 1995, discussions with GECAS for the lease of additional, second-hand Boeing 767-300ERs were under way; these ex-Continental Airlines aircraft would act as a replacement for wet-leased Boeing 767 aircraft ( -300ERs and -200ER leased from AWAS and Royal Brunei) in the fleet.
In September 1996, Vietnam Airlines started offering business class services and in 1999, the airline launched its frequent-flyer program, Golden Lotus Plus; During 1996, Vietnam Airlines looked for aircraft which would substitute the A320s wet-leased from Air France when the deal was over. Apart from acquiring further A320s, the airline considered Boeing 737s and McDonnell Douglas MD-90s. In , GECAS delivered the of Boeing 767-300ER to the carrier, on dry-lease for years. In October the same year, Boeing 767-300ERs and a Boeing 767-200, on lease from AWAS and Royal Brunei Airlines, respectively, were returned to the lessors, but in early 1997 another Boeing 767-300ER was phased in on a one-year lease from AWAS. With its freedom to operate Western-built aircraft, Vietnam Airlines considered the acquisition of long-haul aircraft to better service Vietnamese living overseas. The Airbus A340, Boeing 747 and the McDonnell Douglas MD-11 were topics of discussion. Meanwhile, two Fokker 70s were acquired in May and July to replace the twelve Tupolev Tu-134s. On 3 September 1997, the crash of a Tupolev Tu-134B, on approach to Phnom Penh Pochentong Airport in bad weather, resulted in more than fatalities.
A new livery was introduced in early 1998, initially unveiled on a Boeing 767.In December 2001, Vietnam Airlines signed a historic agreement with Boeing for the acquisition of its first ever US-built aircraft, signalling the start of trade under the Bilateral Trade Agreement between the two countries. The deal involved four Boeing 777-200ERs. The transaction was valued at million; the first aircraft was initially scheduled for delivery in 2003. These four aircraft, along with six others of the same type that are leased from International Lease Finance Corporation (ILFC), are the flagships of the airline, and serve on medium and long-haul routes, respectively. During that year, the airline carried 3.4 million passengers, 1.9 million of whom were on domestic flights; flights to Beijing resumed and services to Kunming were launched. On 4 September 2003, a landmark ceremony celebrated the airline's receipt of its first Boeing 777-200ER purchased outright from Boeing. On 28 October, the airline decided to move its operations in Moscow from Sheremetyevo International Airport to Domodedovo International Airport.
In June 2005, Vietnam Airlines ordered four Boeing 787-8s. Twelve additional 787-8s were ordered in late 2007, some of them to be directly acquired from the company, and the rest to be purchased by the carrier's subsidiary Vietnam Aircraft Leasing Company (VALC). These new aircraft were to allow Vietnam Airlines to expand its network and replace some leased aircraft.Airliner World, March 2005 Regarding the delays from Boeing, CEO Pham Ngoc Minh remarked in September 2009, "We are not happy about the constant delays. It affects our business plan. We expected to get our planes in 2009, then in 2010, and now nobody can confirm to us which is the exact delivery date. I can be patient but it gives us a lot of headaches." In 2010 the airline switched its Boeing 787 order from the to the model, stating that 787-8s did not meet all the requirements Boeing initially promised; it was expected that the airline would receive its first aircraft of the type in 2015.
On 20 June 2005, the airline launched direct services to Frankfurt after having discontinued services to Berlin. It came after the 2004–2005 period when travel between the two countries soared 70%. The following year, Vietnam Airlines was admitted into IATA. As part of the move, Vietnam Airlines had to meet the association's IOSA safety standards.
Expansion: 2007–current