Vietnamese airlines granted access to U.S. market for first time

WASHINGTON/HANOI (Reuters) - Vietnamese airlines will be able to fly to the United States and codeshare with American carriers after the U.S. Federal Aviation Administration declared the Southeast Asian country complies with international safety standards.

The U.S. aviation safety agency said in a statement late on Thursday that it was awarding Vietnam a “Category 1” rating, two weeks after Reuters reported the decision was expected.

“It’s recognition by a very developed aviation authority which requires a very high standard of safety and security,” Vietnamese Deputy Transportation Minister Nguyen Ngoc Dong told Reuters on Friday.

There are currently no non-stop flights between Vietnam and the United States, despite a large market catering to tourism and visits by friends and relatives. Vietnam Airlines JSC and Bamboo Airways have both expressed the desire to fly to the United States.

Bamboo Airways Chairman Trinh Van Quyet said Bamboo was considering destinations such as Seattle, Los Angeles and San Francisco, with the first route to open in late 2020 or early 2021. His airline has ordered 20 Boeing Co 787s for long-haul flights.

CAPA Centre for Aviation Chief Analyst Brendan Sobie said the FAA rating was important for Vietnam symbolically and politically.

But he said Vietnamese airlines could struggle to make U.S. flights profitable because of the lack of demand from high-paying business travelers.

Vietnam Airlines CEO Duong Tri Thanh told Reuters last year that airline could open routes to the United States despite such commercial limitations, due to a government mandate to help grow the economy.

The airline did not respond immediately to a request for comment on Friday.

The FAA last year sent a team to Vietnam to conduct a safety assessment.

Vietnam’s rapidly growing aviation market saw traffic increase 16 percent on average each year from 2010 to 2017, government data shows.

Its airlines, which also include budget carriers VietJet Aviation JSC and Jetstar Pacific, are major customers of Boeing and Airbus SE.

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