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tate-owned domestic air carriers Vietnam
Airlines and Pacific Airlines will soon
be making room on the tarmac for several
privately-operated competitors.
The first, Vietjet Air, is expected to
launch its first domestic flights later
this year or early next year.
Prime Minister Nguyen Tan Dung gave
Vietjet the go-ahead last November to
become the fourth aviation company in
Vietnam, following State-owned Vietnam
Airlines, joint-stock Pacific Airlines
and cargo carrier Vasco (Viet Nam
Aviation Services Co).
Vietjet CEO Nguyen Duc Tam vowed his
carrier would provide services to most
provinces.
Vietjet business manager Robert Hughes
said the entry of private airlines would
mark a turning-point in competition for
the domestic aviation industry, one that
would benefit both clients and service
providers.
Hughes said he expected Vietnam Airlines
and Pacific Airlines, in turn, to
compete more vigorously in terms of
service quality.
Vietnam Airlines CEO Nguyen Sy Hung
said, "We accept the competition. To
begin with, we have been devising
strategies to compete and ensure stable
market share."
Pacific Airlines has already found
itself in a competitive stance with
Vietnam Airlines, the national flag
carrier with many years of experience.
In the race to occupy market share, the
two airlines have made great efforts to
expand domestic flights. Vietnam
Airlines now operates 20 domestic
flights while Pacific Airlines operates
17.
Nguyen Tien Sy, a public relations
official with Pacific Airlines, said,
"One of measures that both airlines are
applying to attract passengers is to
launch sales promotion programmes."
On the
horizon
The air will soon get even more crowded.
In late January, VietAir was also
founded by a consortium of major
stockholders, including the PetroVietnam
Insurance Co.
Sai Gon Airlines and Air Speed Up are
also reportedly in the process of
applying for operating licences.
If all are granted licences, the
domestic aviation market could become a
much more highly competitive market.
It’s a market with a total of 4.5mil
passengers and 75,000 tonnes of cargo
per year, say industry experts.
Under the Law on Civil Aviation,
airlines seeking a business licence must
have sufficient legal capital. An
airline with a fleet of between one and
10 aircraft must have capital of at
least VND200bil (US$12.5mil), for
instance.
Airlines intending to fly international
routes must have at least VND500bil
($31.2mil).
Foreign investors are allowed to invest
in airlines in the form of joint
ventures, with up to 49-per-cent stake.
Source : Viet Nam News |
