High aircraft lease prices make carriers reluctant to expand: Bamboo Airways CEO

Rising jet leasing prices make Vietnamese airlines reluctant to expand their fleets since they fear their losses might then increase, Bamboo Airways CEO Luong Hoai Nam said.

Airfares would only fall from the current high levels when airlines expand their fleets, he said Wednesday at a forum organized by Nhan Dan newspaper, pointing out that the number of planes has dropped by 60-70 since before Covid to 160.

While aircraft are available for lease, prices are now high, he said.

“If leasing more jets results in higher profits we would have done that already.”

The price limits on domestic airfares, which have been around for decades, have made profits impossible, he claimed.

Before the pandemic airlines used to make profits from international flights, but the high competition now has made that challenging, he said.

He urged the government to reconsider the price caps, which go against market principles, to give airlines motivation to expand their fleets.

Lai Xuan Thanh, chairman of the Airports Corporation of Vietnam, also called for removing the caps.

Other countries use floor prices to prevent unfair competition and monopolies, he added.

Nguyen Quoc Ky, chairman of Vietravel Airlines, said the cost of running an airline in Vietnam is very high due to the excessive dependence on foreign equipment, and even minor changes in the global market could result in a big impact on local airlines.