Vietnam property tycoon bets big on new airline

Pressed by poverty into work when he was 14, Trinh Van Quyet now presides over a Vietnamese property empire and is betting billions on a new airline in Southeast Asia’s crowded aviation sector. The 43-year-old tycoon clawed his way up from a tough start in the Vietnamese countryside, his modest aspiration back then to become a civil servant. But from lowly beginnings — his first job was in his mother’s shop — he now oversees the FLC Group empire that includes luxury resorts and golf courses, mining and vocational training. He says he gave up his youth to get where he is today.
“I dared to sacrifice my childhood… when you’re supposed to be able to play, study, and later, fall in love,” he said from his polished high-rise office in Hanoi last week. His company has a market capitalisation of around $200 million and he is branching out, taking a punt on Bamboo Airways, a new airline set for its maiden flight in October and a first foray into a business that can be unforgiving to newcomers.
“We will be huge, right when we launch… we will make a profit as soon as we start flying,” the bullish executive says.
His master plan is to lure piles of passengers to “undiscovered” holiday destinations — many in spots he has resorts — offering high-quality service on the cheap. But he’s got a lot going against him.
Bamboo Airways will come up against heavyweights such as AirAsia and Thai Airways as well as local players Vietnam Airlines and VietJet.
With a mushrooming middle class hungry for travel, Vietnam’s aviation market has soared in recent years. Passenger numbers jumped to 62 million last year from just 25 million in 2012, according to the Civil Aviation Administration of Vietnam.
But Southeast Asia’s once red-hot sector is showing signs of cooling while airport capacity is being squeezed across much of the region.
“It’s not realistic to think that the kind of growth that we’ve seen in Vietnam in the last two years will continue,” Brendan Sobie, an analyst at the CAPA Centre for Aviation, said.
Bamboo Airways is likely to struggle for prime slots at the country’s busiest airports in Ho Chi Minh City and Hanoi, while Vietnam’s second-tier hubs are in desperate need of renewal. Undeterred, Quyet has signed up for 20 of Boeing’s 787 Dreamliners worth $5.6 billion and committed a further $3.2 billion to buy 24 Airbus 321neo planes. Thirty per cent of that money will come from FLC — the rest from foreign investors — a huge upfront investment for a startup. While he still does not have his government aviation licence yet, Quyet is in a rush, planning to operate 37 domestic routes after his maiden flight. — AFP

Tran Thi Minh Ha & Jenny Vaughan