State-owned Vietnam Airlines has unveiled plans to expand aggressively again after three years of rationalisation. It intends to double its fleet over the next decade and start a range of new services, including to North America.

Official media reported in February this year that the government had approved a fleet-expansion plan which will see the carrier operating 32 aircraft by 2005 and 46 in 2010. Aircraft types are not specified, although the directive estimates the expansion will cost 15 trillion dong ($1 billion) through 2005 and another 14 trillion dong through 2010.

Vietnam Airlines' fleet comprises 23 aircraft, including five Boeing 767s, 10 Airbus A320s, two Fokker 70s and six ATR 72s. Most of its aircraft are leased, although 18 will be owned outright by 2005 and 34 will be owned by 2010, according to the government directive.

Days before the expansion plan was made public, Vietnam Airlines signed an agreement with ATR to buy three more ATR 72-500s for delivery this year and next. These will be used on domestic routes and on services to Cambodia and Laos. The carrier has also revealed plans to acquire additional 767s and A320s, according to local media reports, and is understood to be assessing the Boeing 777.

A letter of intent was signed in November covering the possible purchase of three 777s. A senior airline executive says an assessment team will be travelling to Boeing's Seattle headquarters soon for further studies and discussions.

According to the government directive, the national carrier will boost domestic and regional services in the coming years and start services to North America. It has in recent months unveiled new routes within Asia and signed new or expanded codeshare agreements with China Airlines, China Southern Airlines, All Nippon Airways and Japan Airlines.

Vietnam Airlines suffered following the start of the regional economic downturn in mid-1997 after growing for years at a phenomenal rate. Growth began to return in 1999, however, and the government directive estimates that passenger traffic will continue to rise by 14% annually between 2001 and 2005, and by 9% annually between 2006 and 2010, with cargo increasing 8% a year. By 2005, the carrier is forecast to be carrying 5.5 million passengers annually.

Source: Airline Business