Vietnam Airlines pre-IPO outlook: rapid growth as 787s & A350s arrive, but competition intensifies

Vietnam Airlines plans to resume long-haul expansion in 2015, ending a hiatus of over two years caused by delays in the 787 and A350 programmes. Vietnam Airlines now expects to begin taking 787-9s and A350-900s in 2Q2015 with eight deliveries slated for 2015 including four growth aircraft.

The government-owned flag carrier has been focusing in recent years on short-haul and medium-haul expansion using its A321 fleet. Long-haul expansion is now becoming critical for Vietnam Airlines to raise its global profile and head off Vietnam's second largest carrier VietJet Air, a fast-expanding LCC which is also now planning to expand internationally into long-haul markets.

Intensifying competition clouds Vietnam Airlines' prospects as it plans for an initial public offering (IPO) in mid-2014. The Vietnamese market has huge growth potential but with LCCs and foreign full service carriers becoming more intrusive, Vietnam Airlines has challenges to overcome as it starts to accelerate expansion.