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The story
Beginnings
Vietnam Airlines has its origins in January 1956, when it was established by the North Vietnamese government under the name Vietnam Civil Aviation (Vietnamese: Hàng không Việt Nam, lit. 'Vietnam 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 (Trung đoàn Không quân vận tải 919), 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 3,000 tonnes (6,600,000 lb) 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 (Đoàn bay 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 nine Airbus A320s (all of them leased from Air France), 11 Antonov An-24s, four ATR 72s, two Boeing 707-300s, three Ilyushin Il-18s, nine Tupolev Tu-134s and three Yakovlev Yak-40s; at this time the route network comprised 14 domestic destinations (including Ban Me Thuot, Da Nang, Dien Bien Phu, Hue, Nha Trang, Phu Quoc and Pleiku) and 16 international destinations (including Bangkok, Hong Kong, Kuala Lumpur and Singapore). On 27 May 1995 (1995-05-27), 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 US$50 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 three 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 (three -300ERs and one -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 February 1996 (1996-02), GECAS delivered the first of three Boeing 767-300ER to the carrier, on dry-lease for five years. In October the same year, two 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's Pochentong Airport in bad weather, resulted in more than 60 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 US$680 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.
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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. 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 –8 to the –9 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
According to several newspaper reports in 2007, the Vietnamese government planned to partly privatize Vietnam Airlines. In the plan, the government considered selling 20–30% of the airline's stake to outsiders, with the government holding the balance. This was a small part of a bigger proposal by the government to privatize its state-owned companies, due to be completed by 2010. Vietnam authorized the plan the following year; however, the plan was not carried out as the airline missed its deadline scheduled by the government, which was arranged for 2010, due to the Great Recession.
On 1 October 2007, the airline and VALC signed a memorandum of understanding for the purchase of ten Airbus A350 XWBs, and 20 additional Airbus A321s. The Airbus A350s will supplement the Boeing 787s already ordered by the airline. This single order will result in Vietnam Airlines becoming one of the largest Airbus operators in Asia. The two companies also ordered five extra ATR 72-500s in December 2007.
Vietnam was chosen as the host of Miss World's 60th contest in 2008. As the country's national airline, Vietnam Airlines was selected as the sponsoring airline for the beauty pageant. Therefore, it was tasked the job of managing all the transport matters for the contest, to be carried out during September and October, just before the beginning of the competition. However, it was later decided to carry out the event in Sanya, China, following speculations of Vietnam withdrawing. In August 2008 (2008-08), Vietnam Airlines added Nagoya, the airline's fourth point served in Japan besides Fukuoka, Osaka and Tokyo, to the route network.
In 2009, Vietnam Airlines and the Government of Cambodia established a joint-venture, having 49% and 51% stockholding, respectively, with the goal of boosting tourism in Cambodia. The joint-venture was a new Cambodian national airline named Cambodia Angkor Air, which started flying in July the same year, using ATR 72 aircraft; an Airbus A321 joined the fleet in September. Also in 2009, the carrier signed a deal for another 16 Airbus A321s plus two Airbus A350s, during the Paris Air Show. In addition, Vietnam Airlines launched a new bilingual website in October to simplify bookings and adopted a new passenger service system designed by IT provider Sabre Airline Solutions.
On 26 August 2010, the airline teamed up with Boeing during the unveiling of its interior modernization programme to increase passenger comfort. From late September to early October, Vietnam Airlines discounted up to 85% of its 90,000 fares to celebrate Thang Long-Hanoi's 1000th anniversary. In November 2010, the airline awarded Honeywell a US$100 million contract to retrofit the Airbus A321s' aircraft flight systems, which is calculated to save Vietnam Airlines US$10,000 per aircraft per year.
In January 2011, plans were announced by the airline to re-initiate an initial public offering (IPO) by the end of 2012; an earlier attempt was stalled by the 2008 financial crisis. Scheduled for mid 2014 after several delays, the IPO and subsequent share-offerings will supply the funds to expand Vietnam Airlines' fleet and network. With the company valued at US$1.5 billion, the government plans to initially keep 75% of the shares. The IPO plan was submitted to the Vietnamese Ministry of Transport in June 2014. Scheduled to commence on 14 November 2014, the IPO received two submissions from foreign companies, but their names have not been disclosed. The corporation was scheduled to be restructured by 2015 to bring it in line with other state-owned enterprises and to shift its focus away from non-core businesses. Following restructuring, the airline group will consist of Vietnam Airlines itself, as well as three carriers; in total, the corporation will comprise 26 independently audited companies.
In February 2012, Vietnam Airlines boosted its stake in the low-cost carrier Jetstar Pacific Airlines to 70%, with Qantas holding the balance. The Vietnamese flag carrier was the major shareholder in Vietnam's second largest airline, but its stake had been transferred to the Ministry of Finance, and subsequently to the Vietnamese State Capital Investment Corporation (SCIC). The carrier's takeover of SCIC's stake in Jetstar Pacific will capitalize the low-cost carrier with US$27 million, an amount that will be directed towards fleet renewal. In late April 2012, the aircraft lessor ALC announced the placement of an order for eight Boeing 787-9s, which will be leased to Vietnam Airlines; deliveries are expected to start in 2017. In late May 2012, the carrier signed an agreement with Vietnam's Eximbank for a loan worth US$100 million, which the carrier will use to finance the acquisition of four Airbus A321s; a further US$100 million was loaned in April 2013 to finance the purchase of eight Boeing 787s. In a deal valued at US$1.7 billion, Vietnam Airlines signed a contract with General Electric in October 2013 for 40 engines to power the Boeing 787 aircraft the airline had on order.
In July 2014, a new route to Tokyo-Haneda from Hanoi was introduced.
Vietnam Airlines received its first Airbus A350-900 in late June 2015, becoming the second operator of the type worldwide after Qatar Airways. In August 2015 (2015-08), the airline's first Boeing 787-9 entered the fleet. In November 2018, the carrier received its first Airbus A321neo. Vietnam Airlines' participation in Cambodia Angkor Airlines ended in April 2020 when all the shares were sold to an undisclosed buyer, while acquiring all Qantas's stake in Jetstar Pacific, eventually rebranding the carrier as Pacific Airlines in the same year. In November 2021, Vietnam Airlines started its first non-stop service to the United States, from Ho Chi Minh City to San Francisco. During the 2022–2025 recovery period following the COVID-19 crisis, Vietnam Airlines focused primarily on digital transformation to enhance customer experience and streamline operations.
From Wikipedia’s article on Vietnam Airlines, shared under CC BY-SA 4.0.5