Full throttle: Vietnam scrambles to achieve FAA safety rating

Reports indicate the U.S. Federal Aviation Administration (FAA) could grant Category 1 rating to Vietnam “soon”, allowing the Southeast Asian nation’s airlines to fly to the U.S. and codeshare with American carriers. Vietnam’s efforts to gain the top safety ranking have been backed by U.S. giant Boeing, as the country’s airlines are major customers of both Boeing and Airbus jets.

The Civil Aviation Administration of Vietnam (CAAV) has been attempting to achieve the top air safety ranking for quite some time and may now be on the verge of obtaining Category 1. According to two U.S. officials cited by Reuters on January 31, 2019, the regulator may be issuing the no. 1 rating for the country “within weeks”.

Under the Convention on International Civil Aviation, also known as the Chicago Convention (signed in 1944), each country is responsible for the safety oversight of its own carriers, the FAA states. The agency conducts what is known as the International Aviation Safety Assessment (IASA), auditing the Civil Aviation Authority (CAA) of each country that has carriers operating flights to the U.S.

The goal of the assessment is to determine if the foreign CAA meets the safety standards of ICAO (International Civil Aviation Organization). Granting Category 1 rating allows the country’s carriers to initiate or continue air transport services to the U.S. and have codeshare agreements with American carriers. In other words, the ranking is required for any Vietnam-based airlines wanting to add U.S. destinations.

So where does Vietnam stand?

Currently, Vietnam does not hold a FAA air safety rating, as public IASA records reflect, and there are no non-stop flights from the country to the U.S. Instead, the U.S.-Vietnam market is served through hubs in South Korea, Japan, Taiwan, and China. Meanwhile, Vietnams’ Southeast Asia neighbors – Malaysia, Indonesia, Singapore and the Philippines – all hold Category 1.

Direct flights to the U.S. are operated from Singapore and the Philippines. Most notably, Singapore Airlines (SIA1) (SINGY) offers non-stop flights to a number of destinations, including Houston, New York, Los Angeles and San Francisco, as well as flights to Honolulu, Hawaii, on its subsidiary Scoot. Philippine Airlines offers direct flights to Los Angeles from capital Manila. Services to the U.S. from Malaysia and Indonesia are provided through connecting flights and the airlines’ codeshare partners.

Thailand, on the other hand, has been downgraded to Category 2, which means the country’s aviation safety processes fall short and need to be reviewed by the FAA. Under this rating, the FAA states, carriers from that country cannot initiate new services to the U.S. while they implement corrective measures.

At least until the beginning of 2018, as Bloomberg wrote at the time, Vietnam also held a Category 2 ranking, but must have dropped out completely as IASA ratings do not currently include the country (countries are removed from the list after four years if they have no services to the U.S., no codesharing agreements and no significant interactions with the FAA).

Eye on the prize

Back in August 2018, a team from the FFA visited Vietnam to conduct the necessary safety assessment, Air Transport World reported at the time. The following month, CAAV stated, it received a four-person delegation from the U.S. Ministry of Transport and the U.S. State Department to discuss recent developments in Vietnam’s aviation industry; an indication that the CAAV might be heading towards a safety rating.

In October of last year, CAAV finally confirmed that the U.S. regulator had conducted the safety audit and declared Vietnamese civil aviation administration as “safe”. Eight key factors, including licensing and sanction application, had been assessed in order to evaluate Vietnam’s compliance with international aviation safety standards.

Boeing lends a helping hand

According to a report by Bloomberg dating February 2018, Boeing has been working with the governments of U.S. and Vietnam to lift the country’s air safety rating. The aerospace giant, however, was not being altruistic in its intentions: the company hoped to help enable the state-run Vietnam Airlines to operate flights to U.S. destinations using its potentially purchased new Boeing jets.

“Right now, they don’t have Category 1. So we are working with the Vietnamese government and the U.S. government to open that up,” Dinesh Keskar, senior vice president of Boeing’s Asia Pacific and India sales was quoted as saying in an interview at the Singapore Airshow 2018.

Vietnam Airlines had signed an initial agreement to purchase Boeing’s long-range 777-8 jets. The flag carrier has reportedly been considering flights to Los Angeles by late 2019 – early 2020, CEO Duong Tri Thanh said back in November 2017, according to Bloomberg.

Determining planned routes, such as a non-stop service to Los Angeles, would allow Vietnam Airlines or any other carrier to place a large aircraft order. A final order would therefore depend on the country getting the top safety ranking, Keskar was cited as saying by Bloomberg.

Vietnam’s four scheduled airlines are regular customers of Boeing and Airbus aircraft, the biggest of them being VietJet Air. As of December 2018, VietJet held orders for a total of 171 Airbus planes, including 123 A321neos, the manufacturer’s orders and deliveries book shows. The low-cost carrier, which currently operates an all-Airbus fleet, also has an outstanding order for 100 737 MAX jets as Boeing’s summary through the same period reflects.

When it comes to Vietnam’s national carrier, however, the jet order situation remains unclear, for now at least. For instance, deliveries of its sought-after 777-8 jet will not start until a couple of years later. Part of the much anticipated 777X aircraft family, the 777-9 variant, is now expected to enter into service in 2020 while the 777-8 would follow two years later, and that’s if the certification goes according to plan.

Vietnam Airlines currently operates four 777-200ER wide-bodies and eight 787-9 Dreamliners. The carrier also has Airbus A321, A330 and A350 jets in its fleet of around 86 aircraft.

How robust is Vietnam’s aviation market?

According to CAAV data, Vietnam’s aviation market saw traffic increase 16% on average each year from 2010 to 2017. In 2018, Vietnamese airlines transported over 50 million passengers, a 14% increase compared to 2017. Early in January 2019, Vietnam also inaugurated its new airport – the Van Don International Airport (VDO), located in the northeastern part of the country.

Further proof of Vietnam’s growing aviation market is the recently launched (January 16, 2019) Bamboo Airways. The startup is the country’s third low-cost carrier, after Jetstar Pacific (70% owned by Vietnam Airlines) and VietJet – the fifth biggest LCC in Southeast Asia by fleet size, according to CAPA airline profiles.

Bamboo Airways has a $5.6 commitment for 20 Boeing 787-9 Dreamliners as well as a $3 billion deal for 24 A321neos (list prices). The carrier plans to offer flights within Vietnam before expanding into other Northeast Asian markets such as China, Korea and Japan.


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