Airlines report gains and expansion

Air carriers serving Vietnam appear to be not just weathering the economic crisis, but thriving in it. Recent reports from Vietnam Airlines (VA), Vietjet Air and Jetstar Pacific reveal that the airline industry is heating up in Vietnam.
At a ceremony announcing the new VA Hanoi-Fukuoka air route on October 9, 2009, VA Deputy General Director Trinh Hong Quang speculated that the national flag air carrier will earn some 50 billion dong in profit in 2009.
Quang said that the air carrier has expanded despite the economic crisis because it anticipated difficulties and set up reasonable policies to lower expenses.
“We have been flexible with our business. For example, we have been using smaller aircraft on air routes with low numbers of passengers,” Quang explained.
While other airlines have been suffering, VA has decided to open many new air routes, such as the direct Hanoi-Fukuoka flight twice weekly.
VA is now the top choice of Japanese travelers coming to Vietnam, Laos and Cambodia. The air carrier hopes to see the number of Japanese travelers to Vietnam rise from 400,000 to 500,000 in the future.
Additionally, Jetstar Pacific has enjoyed an impressive passenger growth rate of 30 percent in the first six months of 2009, with nearly one million passengers served, compared with the same period last year. On the HCM City – Hanoi air route, the airline now provides 40 percent of regular flights.
Jetstar Pacific hopes that its total number of passengers on domestic flights will reach two million in 2009, an increase of 25 percent over the previous year (1.5 million).
Vietjet Air, the first private airline in Vietnam received its flight license in December 2007, but has delayed launching flights several times due to economic difficulties.
Luu Thanh Binh, Deputy Head of the Civil Aviation Administration of Vietnam (CAAV), which once threatened to revoke Vietjet Air’s license, noted that CAAV has extended their deadline from seven months to one year, granting Vietjet Air additional time to prepare.
In related news, Circular No 103, which removes the airfare ceiling, has not come into effect. Currently, domestic airlines must follow ceiling guidelines (i.e. they cannot set airfares higher than the ceiling level stipulated by CAAV). Airlines want the ceiling removed so that they can base airfares on demand and flying capacity.
Binh reported that, although Circular 103 removes the airfare ceiling, the 2006 Civil Aviation Law is still valid and it stipulates that ceilings must be set. In order to implement the circular, he commented, the law itself must be amended.