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Vietnam’s Budget Carrier Launch Hits Headwind

: Sep 17, 2018 - : 4:49 am

The debut of Bamboo Airways, Vietnam's third low-cost carrier, is surrounded by uncertainty as authorities continue to mull approval of the airline.   The airline which is a part of real estate developer FLC Group, is awaiting its operating license ahead of flights scheduled for October. However, authorities are believed to have doubts about the carrier's financial fitness and operational capabilities. Still, FLC remains optimistic and plans to begin ticket sales later this month, reported Nikkei Asian Review.   The carrier is eyeing 24 domestic and 16 international routes by the end of 2023, mainly to destinations where FLC has resorts, including central Vietnam's Binh Dinh Province and the northern city of Thanh Hoa.   It has already signed a memorandum of understanding for the purchase of 24 Airbus A321 jets, and is expected to buy large aircraft from Boeing, including 787 Dreamliners.   Bamboo Airways was officially established in July. If the operating license is granted, the carrier's maiden flight will be between Hanoi and Quy Nhon, the capital of Bunh Dinh Province, on Oct. 10.   Observers believe one reason authorities are dragging their feet is the weak creditworthiness of emerging real estate developers like FLC. The company, established in 2008, experienced rapid growth driven by its resort developments. Revenue reached 11.64 trillion dong ($500 million) in 2017, almost a sevenfold increase from 2013.  

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