Domestic flights across Vietnam will have internet service in the near future. Vietnam Airlines confirms its intentions to add in-flight connectivity to its domestic fleet. The news is part of a strategic alliance with local telco Viettel and will be delivered through an air-to-ground (ATG) network.
Vietnam Airlines already offers inflight connectivity on some of its A350 aircraft. At least it did. That service has come and gone at least once over the years. It is unclear if the carrier ever transitioned to higher speed services that would be useful to passengers or if the system is still powered on today.
The new ATG offering, however, should deliver plenty of bandwidth on board. And deploying the network should be relatively easy given the size and shape of the country.
Just a dozen or so towers could provide coverage across the entire country, with room to add more if additional capacity is required.
One potential drawback with the decision to pursue an ATG solution is that it will not cross borders with the company’s regional international routes. Domestic flights are a large portion of the company’s single-aisle operations but so are nearby international markets.
Striking similar deals to deploy a network with a local partner in neighboring countries is possible, but without the EU-like structure providing a regulatory framework is will be a harder go than what was available for INmarsat to build out its European Aviation Network.
Viettel did not name its partner supplier for the infrastructure build out. SkyFive.World is the leading candidate given its mature platform and presence nearby in China. SkyFive did not respond to a query regarding its role in the project.
Not only is it relatively easy to build out the network in Vietnam, but the potential value for the airlines is significant.
Massive domestic growth expected in Vietnam
IATA expects “strong anticipated catch-up growth in both incomes and living standards is expected to result in the domestic market entering the ranks of the top 10 largest in the world in the future.” The market is booming and has significant upside still. And many of those travelers will now have the opportunity to be online while on board.
While the longest domestic flights are less than two hours there are a ton of flights crossing the country on any given day. At least there were prior to the pandemic. Domestic traffic levels bounced back quickly when the government previously loosened restrictions and there is little reason to believe that won’t be the case again as the population gets vaccinated and the pandemic fades.
The market is also exceptionally price-sensitive. Liberal rules around aviation start-ups led multiple LCCs to set up shop, some wholly local and others partnered with foreign carriers. Adding a product-based differentiation rather than competing solely on price could prove helpful for Vietnam Airlines. Especially as it is rarely the cheapest in the market.
Other angles to the partnership
Separately from the inflight connectivity deal, Viettel and Vietnam Airlines intend to partner on a number of other digital initiatives, including systems for business management, infrastructure services and IT as well as a new self-checkin solution.
The airlines will also continue to provide products and services for Viettel under a preferential trade policy as well as coordinate with the telecom services provider to build a service ecosystem for customers of both sides. The two will study a plan to establish a joint venture company to consolidate and expand cooperation in the future, contributing to boosting the national socio-economic development.
Acting Chairman and General Director of Viettel Major General Le Dang Dung said the cooperation will not only generate new experiences to passengers but also bolster the growth of both businesses in contribution to realising the nation’s digital transformation goals.
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