What does Vietnam’s booming aerospace market mean for OEMs?

LONDON – As the Vietnamese nation of around 90 million people has marked promising prospects in a post-COVID-19 era, aircraft manufacturers and OEMs are monitoring the market and preparing for an aggressive presence in the country as demand air travel increases even further. OEMs seek aviation sales, new customer relationships, related technologies and supply chain in Vietnam.

Boeing

US aerospace giant Boeing held an aerospace industry forum in Hanoi on August 25, to discuss its supply chain development plans, aerospace manufacturing in Vietnam and corporate strategy in Vietnam and the greater ASEAN region.

Boeing’s move was touted as very opportunistic but smart, as Vietnam’s aviation sector is recovering very impressively, and some have taken a bolder step by pledging to buy newer planes.

Vietnamese airlines are extremely optimistic about the aviation industry. Boeing’s footprint in Vietnam has been intensified by visits by top Boeing executives to the country, including Boeing senior vice president and Boeing International president Michael Arthur in June.

Arthur said Boeing has realized that the Southeast Asian nation’s market is very important to them, as well as to OEMs, and recognizes that in the years to come competition will be fierce. He said, “Boeing is determined to play a bigger role in Vietnam’s history, that’s why I came here and why we opened an office here.”

“Boeing has many suppliers of companies based in Vietnam, which work directly with its Asian partners in Japan, South Korea and many others. So, on every new Boeing aircraft, there is a piece of Vietnam. We would like this room to be bigger, and that is the goal of expanding our operation in the country,” he added.

The American manufacturer is very keen to help the country’s aviation ecosystem, as the sector is recovering faster than expected in a post-pandemic world. This includes the areas of digital transformation and sustainability.

The company also wants to expand its physical assets (facilities) in Vietnam and is currently looking for local partners to join forces. Additionally, Boeing is considering a new maintenance and warranty facility in the country and is also building meaningful relationships with local entities.

As we speak, the US aircraft manufacturer is currently seeking aircraft leasing opportunities to supply parts to airlines and operators in Vietnam and is also working with the Civil Aviation Administration of Vietnam (CAAV).

In June alone, Boeing, as part of its broader strategy in the country, helped the Vietnam Air Traffic Management Corporation levitate the country’s air navigation standards.

Airbus

Similar to what Boeing is doing, Airbus is also consolidating its profile in the country. Airbus’ decision to do so can be seen as the European manufacturer showcased its latest Airbus A220 in Hanoi last May, touting the plane’s operability in the Southeast Asian country.

In the country, Bamboo Airways is one of the last Airbus customers for new aircraft, along with Vietnam Airlines. Other new entrants that have adapted Airbus also include Pacific Airways and Vietravel, all of which use the state-of-the-art narrow-body A320 Family. It is a national carrier and operates the A350s and previously the A330s.

Airbus has worked with its local aviation partners to create more than 1,500 skilled people, propelling Vietnam into one of the most important aviation markets in the region.

Conclusion

As both OEMs realize that Vietnam is becoming one of the most lucrative markets in the region, if not the world, the country presents opportunities for both Airbus and Boeing. With Vietnam planning to build 6-7 new airports in the coming years, the demand for newer aircraft will undoubtedly increase.

The booming aviation market in Vietnam not only means the sale of aircraft to airlines, but also a strong involvement in the country’s aviation ecosystems, including parts manufacturing, customer services , technology and training.