VietNam Business: carrier

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Thursday, January 6, 2011

Air Mekong wraps up test flights, ready to take off

Air Mekong, Vietnam’s third private airline, has safely concluded test flights to several domestic destinations, qualifying for a license to become operational this week, the Civil Aviation Administration of Vietnam said.

The CAAV will hand over an Air Operator's Certificate this week, enabling the carrier to begin its first flight Saturday, Vo Huy Cuong, director of the regulator’s Air Transport Department, said.

It will initially operate three daily flights between Hanoi and Ho Chi Minh City before launching services to the Central Highlands cities of Pleiku and Buon Ma Thuot, Phu Quoc, and Con Dao.

The carrier has taken delivery of four Canadian-made 90-seat Bombardier CRJ-900 aircraft leased from the US’ SkyWest Leasing Inc for three years.

The company, which owns SkyWest Airlines, is looking to acquire a 30 percent stake in the carrier.

Air Mekong is the third private operator to be licensed after Vietjet Air and Indochina Airlines, and has a chartered capital of VND200 billion (US$10.5 million), the minimum required under the law.

Indochina Airlines, the first operational private carrier, had its traffic rights revoked earlier this year after it repeatedly failed to fulfill its commitment to fly again or prove its financial capability.

Monday, December 13, 2010

Competition heats up in domestic airline market

Competition heats up in domestic airline market Competition in the local airline market is set to get tougher as large carriers try to boost sales with lower airfares and new players get ready to launch their service, experts said.

National carrier Vietnam Airlines has launched a new program, offering discounts of up to 50 percent on domestic flights. Its airfares now cost between VND400,000 and VND860,000.

Low-cost carrier Jetstar Pacific have been selling 1,000 tickets at only VND100,000 from September 9 to October 10.

Vo Huy Cuong, head of the Civil Aviation Administration’s Air Transport Department, said airlies typically offer cheaper fares during the low season from September to October.

When both Vietnam Airlines and Jetstar Pacific cut their prices, the competition would get really tough on new players like Air Mekong and Blue Sky Air, said Cuong.

Air Mekong, a private air carrier that has partnered with Skywest Inc., will start its flights on October 9. The company will use four CRJ-900 aircraft produced by Montreal-based Bombardier Inc. for 20-30 flights per day.

An Air Mekong representative said the carrier is prepared for the competition. Each airline has its own strategies and Air Mekong will focus on business class services, the representative said.

Meanwhile, Blue Sky Air, another new carrier, said it would also have its own niche market, using helicopters for its on-demand service.

An expert who wished to be unnamed said as private carriers are not supported financially by the government, they have to take measures to prevent losses in the long term otherwise they would be caught in another Indochina Airlines’ situation.

Indochina Airlines, the first private airline to run flights in Vietnam, early this year suspended its services due to debt problems.

The expert also said unlike Vietnam Airlines, smaller carriers are now allowed to operate international routes and thus they will not have more revenues to offset losses caused by domestic services.

Cuong said that the market has great potential for growth, but all the players would need to be competitive enough to stay in the game.