[030517.EN.AIR] Vietjet To Set Up Freighter Fleet as Vietnam's Freight Throughput Doubles

VIETJET Air Cargo will launch its first freighter service in October, according to CEO Do Xuan Quang, as Vietnam's air cargo industry continues on a strong growth trajectory.

"We are planning to buy or lease a freighter and really build up our cargo operations," Mr Do told the London's Loadstar.

With a Korean express logistics company as its first customer, Vietjet's initial freighter services will concentrate on South-east Asia, with Singapore, Bangkok, Hong Kong and Manila likely destinations, according to the CEO.

Vietjet has expanded rapidly since its bikini-clad launch in 2011, building up a fleet of 41 aircraft in less than six years. Last year, the carrier recorded a 39 per cent increase in revenue to US$1.23 billion, while passenger numbers jumped 50 per cent to over 14 million.

Vietjet's $170 million IPO in February saw it become Vietnam's largest airline by market capitalisation, overtaking flag-carrier Vietnam Airlines. The IPO has reportedly made Vietjet founder Nguyen Thi Phuong Thao Asia's first self-made female billionaire.

"Our chairwoman is very ambitious. After five years, we've been very successful: from just one or two aircraft we now have over 40 and we will have 100 by 2020," said Mr Do.

"But the belly capacity of the passenger aircraft is too small, with only two or three tonnes. Many cargo commodities are palletised and need bigger capacity aircraft, so we need a freighter."

After initially launching on South-east Asian tradelanes, Mr Do said Vietjet planned to add longer intra-Asia destinations, including Tokyo, Incheon, and Shanghai, and eventually further afield to Dubai.

"After that's successful, we'll go further, to Europe - Frankfurt, Amsterdam, London, Paris - and also to New York. This is our big plan for the future."

Vietnam's current throughput of 1.4 million freight tonnes is expected to nearly double to 2.5 million by 2020. Last year, domestic traffic grew 16 per cent to 400,000 tonnes and exports reached 355,000 tonnes, up some 18 per cent. China dominates Vietnam's imports with around 26 per cent market share, followed by South Korea (20 per cent) and the US (9 per cent).

Mr Do described the congestion at the capital's Tan Son Nhat Airport as "terrible" with limited space of only 51 aircraft parking slots.

"We need a new airport not in the city, like now. The government has seen this but we need $18 billion in funding. And Hanoi will break through 1 million tonnes by 2019, so we need another terminal there too or it's not enough."

Source : HKSG.