IceTrojan

See full details on my VNAFlyer blog:
Boeing Signs Memo with CAAV, Pledges to Help Start Direct Vietnam-US Flights

Boeing and the Civil Aviation Authority of Vietnam (CAAV) signed a Memorandum of Collaboration last week to work together towards the goal of CAAV receiving CAT-1 status from the FAA, which would allow Vietnamese carriers to fly to US airports.

Right now, VN is the only carrier with long haul services (LCC VJ recently delayed any plans to acquire widebodies), and had aspirations of starting SGN-LAX in 2016. The US-Vietnam non-stop market is currently untapped, with only UA providing one-stop service via HKG.

There are about 1.7 million people with Vietnamese heritage living in the US and Canada.

The CAAV would have to meet ICAO's standards for aviation safety and oversight to receive CAT-1 status, but has some major hurdles to overcome. Boeing will be providing their technical expertise (and I'm sure, political support).

Of course, VN is a major Boeing customer, set to take delivery of its first 789 in a few months. The 789 has the range to make it SGN-LAX, while the current 772s do not.

Relevant FT threads:
http://www.flyertalk.com/forum/other...l?highlight=vn
http://www.flyertalk.com/forum/other...l?highlight=vn

mediator

Will the business cabin offer all-aisel access?

IceTrojan

Yep, same seats as CX, etc., (Cirrus Zodiac), 1-2-1 configuration.
http://vnaflyer.blogspot.com/2015/01...g-787-new.html

mediator

Looks great!

bzcat

UA179 has a change of plane involved in HKG. The EWR-HKG portion is on a 777 but the HKG-SGN portion is on a 737.

There are lots of one-stop US-Vietnam options via HKG, ICN, and TPE, especially from the West Coast.

I'm sure VN non-stop flights on SGN-SFO and SGN-LAX seems like a good idea to some but it probably won't make any money. It will be one of the longest commercial flight in the world and the traffic is low yield. Hard to compete with KE's 5 daily flight to LAX, or CX's 4 daily to LAX, or BR's 3 daily to LAX, or CI's 2 daily to LAX...

IceTrojan

I think the draw of an actual non-stop will be huge, and I don't think VN will have a problem filling up each flight with pax and cargo going both ways. Plenty of commerce flowing now and in the future to fill up the C cabin, and don't underestimate the "moms and pops" who already (sometimes irrationally) pay a premium to avoid long connections, and won't even hesitate to avoid connections altogether, especially if they barely speak English and they can communicate with the crew in their own native language.

The 789 and 359 are game-changers, and LAX is the biggest potential market for VN to be connected to.

Also, if VN goes to SFO, I think they'd do HAN-SFO as the complement to SGN-LAX service.

AndyInSaigon

It's hard to imagine a rush to fill VN's C seats when all the competition has better soft products and benefits (regardless of having to make a stop enroute.)

IceTrojan

One could hope that VN improves their soft product with the introduction of the Cirrus seats. I also think FT tends to place a heavy emphasis on soft product, and most non-FTers care more about hard product, which in this case is in line with VN's peers.

AndyInSaigon

Agreed: one could hope, but I gave up hoping on them long ago. However there is nothing like competition to instigate improvements and they will have substantial competition. I do not want them to fail by any means!

FLLDL

Difficult to imagine that these flights will work out commercially given the enormous one stop competition via Japan, China, Korea, HK, Taiwan etc.

Even SQ and Thai abandoned their non stops from the U.S as they were unable to draw a sufficient premium over the one stop competition in order to justify the much higher cost of operating the non stop ULH flights

IceTrojan

I hear you. If and when SGN-LAX starts, I said that would be their crown jewel route, so I believe they would pull out all the stops and present a great service in the beginning. My worry is whether they keep it up or start cutting back, because THEY don't see the value in certain things vs. what the pax values.

I do see it as a deeply-ingrained cultural issue that gets translated into the corporate world, and I'm hoping (but not expecting) that they get their heads out of the clouds.

They also didn't have 787s nor 359s at their disposal. The TG's 345s and SQ's 346s were just terrible, and the 744s' economics were still off for ULH on thinner routes. VN has a chance with the new aircraft, and a much larger ethnic population without direct service.

You also have the current implosion of TG, which will help VN very much in becoming the regional dominant carrier they want to me.

The competition you mention will hopefully translate into a meaningful improvement in their service on board, if they hope to draw pax in, especially HVFs.

There's no doubt that Saigon's economy is booming... I'm betting that saving 2-4 hours each way vs. connecting flights matters to many, enough so that they'll accept a slight downgrade in service.

But only a slight downgrade...

bzcat

How many passengers will pay a premium for SGN-LAX over SGN-TPE-LAX?

TPE is right over the great circle line between SGN and LAX... (note the total mileage on both tracks... there are zero mile deviations). And transfer at TPE is pretty seamless and easy, even for Vietnamese nationals.

http://www.gcmap.com/mapui?P=sgn-tpe...SU=kts&RS=best

I think if the Vietnamese Govt wants a vanity route, they can certainly pay for it. But purely from a commercial consideration stand point, this potential service makes very little sense. Flying via TPE will give SGN travelers 7 daily departure options between CI and BR vs. VN's potential once daily (or even less than 1x daily)

I'm all for new direct air service from LAX but this one strikes me as marginal and perhaps unnecessary. But I look forward to it anway

IceTrojan

Let's break this up a bit: from the perspectives of the biz pax, the regular pax, and the airline.

The biz pax:
Time is money. From a quick sampling on ITA, the absolute fastest way to get from LAX-SGN is on BR via TPE in 19h20, with a 1h20 connection, and that's just scheduled gate to gate.

On the return, it's scheduled 16h10 with 1h25 layover on TPE.

At the minimum, if you eliminate the layovers plus the additional time it takes for approach/descent, taxiing, taxiing again, and takeoff/climbout, you're shaving at least 2.5 hours off travel time.

There is the increase likelihood of IRROPs because of having 2 flight segments instead of one. What if you miss your connection? What if there's a MX? What if there's inclement weather?

There are the other intangibles, such as the added stress of displacing yourself out of your seat, have to make it to the other gate, then resettle into another seat for the rest of the journey. Plus, having a straight 18-hour flight with lie-flat seats means you do whatever it is you do to readjust to the time.

Plus VN will have all the feeder service to LAX that will make it a one-stop trip for those pax who aren't lucky enough to live near a gateway vs. 2 stops. Or those traveling to other parts of Vietnam via SGN, where it becomes 1-stop vs. 2 for them.

Finally, what about the prospect of turning HAN/SGN into the gateways to the rest of SE Asia? Especially with the downfall of TG and MH, it creates room for VN to wedge themselves right in there.

From the regular pax:
The dread of connecting at another airport is real. Plenty of people will pay a premium to avoid the 10-14 hour layover that is prevalent on routes via ICN or NRT. TPE has better timing, but still, these folks aren't like us; they don't think transit is an easy task, and would prefer to just get there and back without stopping, even if the stop is along the way.

Throw on all the folk who are nervous about their own English abilities, and absolutely dread the thought of possibly dealing with a 3rd foreign language.

With that baseline, imagine the draw of a single flight with a crew that speaks Vietnamese... <insert the "Shut Up and Take My Money" meme>

For the airline:
The suggestion that the government would have to subsidize it isn't off base. I'm willing to bet that if VN had FAA authority, they'd already run the route on a 772 with a tech stop and have it be a loss. This would be more of a political PR move, but surely a huge one.

Ignoring politics, this route is perfectly designed for the economics of the 789/359, where operating costs are driven down the point where it may be in the black, and if it's in the red, the only slightly so. Bring politics back in, and it's a small cost for the government to subsidize when it translates into increased commerce and tourism for the whole country.

So the questions are indeed:
- Can VN provide non-stop service at the same prices as one-stop competitors, and have it be worth it to them?
- If not, how much more are people willing to pay for non-stop?

I honestly don't think I'm overstating the mindset of pax here. I really do think VN has the audience, as long as they don't go all crazy with the pricing.

s0ssos

Do the crews on the LA to TPE flight speak Vietnamese?
I was on a flight in Asia and they were speaking a language that wasn't of either of the countries it was going to or from.

soorox

CI and TPE carry so much Vietnam traffic that they have Vietnamese speaking crew on their Nth America flights to TPE and onwards to Vietnam. I'm not sure if KE and OZ have them but they do have Vietnamese speaking crew on Korea-Vietnam flights.

I think BR had an add advertising their crew could speak Vietnamese.