Bamboo Airways will launch its first flight Dec. 29 as Vietnam's third low-cost carrier, ratcheting up competition in the country's skies with routes to resort areas where its parent real estate company FLC Group owns properties.

The carrier received an aviation license from the government on Nov. 12. Its starting roster includes routes to coastal city Quy Nhon from Hanoi and Ho Chi Minh City, as well as flights between Ho Chi Minh and Hanoi, according to local news reports.

Bamboo's arrival intensifies pressure on players like state-run Vietnam Airlines, which already contends with the country's leading low-cost airline Vietjet Aviation and the encroachment of international budget carriers.

The airline initially was scheduled to start operations Oct. 10, but the government put off issuing a license due to concerns over the company's finances and operational knowledge.

Bamboo plans to offer fares that fall between the costlier Vietnam Airlines and more wallet-friendly Vietjet Aviation. It will focus on the domestic sphere, but aims to cultivate overseas markets like Japan and South Korea starting next year. By 2023, Bamboo intends to fly 24 domestic routes and 16 international ones.

FLC, established in 2008, looks to diversify beyond developing resort properties, the field that has powered its growth. The company hopes that offering flights to its resort areas will benefit both the property and aviation businesses. It inked deals to obtain aircraft from Airbus and Boeing.

Vietnam Airlines which has its own budget affiliate, Jetstar Pacific dominated the country's domestic flights until Vietjet arrived on the scene in late 2011. With Southeast Asian budget rivals like Malaysia's AirAsia adding more flights to and from Vietnam in a bid to seize tourism demand, the competition is growing harsher still.

By Tomoya Onishi - Nikkei Asian Review - November 23, 2018