ATR sees strong growth potential for regional aviation in Việt Nam

ATR sees strong growth potential for regional aviation in Việt Nam

A joint study by ATR and Vietnamese transport consultancy Transport Engineering Design Inc identified 87 unserved domestic routes with sufficient demand to support regional aircraft operations.

An ATR 72-600 turboprop aircraft. — Photo courtesy of the airline

Aircraft manufacturer ATR sees significant growth opportunities in Việt Nam's regional aviation market, driven by rising demand for domestic connectivity, airport expansion and tourism development, company executives said.

Việt Nam is one of only two markets in Southeast Asia with limited regional aviation activity involving 50- to 70-seat commercial aircraft, said Jean-Daniel Kosowski, ATR sales director for Việt Nam.

A joint study by ATR and Vietnamese transport consultancy Transport Engineering Design Inc identified 87 unserved domestic routes with sufficient demand to support regional aircraft operations, Kosowski said in comments to Việt Nam News.

ATR estimates the country could support around 25 new ATR 72-600 turboprop aircraft if those routes are developed.

The company said the study identified 149 potential domestic routes shorter than 555km, of which 87 were considered commercially viable but are not currently served.

Việt Nam's plans to expand its commercial airport network to 30 airports by 2030 from 22 currently, combined with economic growth and rising passenger demand, are expected to support the development of regional air services, ATR said.

While the country's aviation sector has been driven largely by major domestic and international routes served by narrow-body jets, many secondary cities, island destinations and regional airports remain underserved, creating opportunities for smaller aircraft, Kosowski said.

"There is growing passenger demand, an expanding airport network and many city pairs that are better suited to regional turboprop aircraft," said Jean-Pierre Clercin, ATR's head of Asia-Pacific.

ATR said its ATR 72-600 consumes about 45 per cent less fuel than comparable regional jets, allowing airlines to operate routes that may not generate sufficient demand for larger aircraft.

Cross-border opportunities

An ATR 72-600 turboprop aircraft. — Photo courtesy of the airline

Beyond domestic services, ATR sees opportunities for short-haul international routes linking Việt Nam with neighbouring countries.

It cited the route between HCM City and Phnom Penh operated by Air Cambodia using ATR 72-600 aircraft as an example of how regional aircraft can support tourism and business travel on shorter routes.

Trần Thị Lam Phương, vice chief commercial officer of Air Cambodia, said ATR aircraft provide flexibility within the airline's fleet strategy, allowing it to develop markets and maintain sustainable frequencies on routes that may not yet support larger aircraft.

Phương added that Air Cambodia was the launch customer for ATR's new business-class cabin product, aimed at improving passenger comfort on regional routes.

Air Cambodia currently operates three ATR 72-600, ATR said, adding that 94 per cent of domestic flights in Cambodia are operated by ATR aircraft while 62 per cent of international flights within 300 nautical miles of Cambodia use the model.

The company also identified potential for greater connectivity between Việt Nam and secondary cities in Laos and Thailand, saying cross-border services linking smaller cities remain an underdeveloped segment of Southeast Asia's aviation market.

Market remains small

Despite the growth potential, Việt Nam's regional aviation market remains underdeveloped. Regional aircraft account for about 3 per cent of the country's commercial fleet, compared with a global average of 25 per cent, according to ATR.

The company said that Việt Nam also lacks a dedicated regional carrier, limiting connectivity on thinner routes that may not be viable for larger jets. 

Meanwhile, airlines have largely focused on narrow-body jets serving major domestic and international routes, it said. 

"To address this, Việt Nam would benefit from an airline strategy dedicated to regional aircraft – either a regional subsidiary of an existing carrier or a new regional start-up – to capture the opportunity that larger jets are not designed to serve efficiently," Kosowski said. 

According to him, several operators have also highlighted the current fare caps on domestic routes as a constraint, as they can limit the ability to fully reflect operating costs on thinner regional services.

"Greater pricing flexibility could help improve the commercial viability of these routes and support network development," he told Việt Nam News.

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