VietNamNet Bridge – A private airline may have to stop flying
after Tet (February 2013), Tien Phong has quoted its sources from the Civil
Aviation Authority of Vietnam (CAAV) as reporting.
If this happens, this would be
the second private airline which has to stop providing commercial flights in
Vietnam. The first one was Indochina Airlines which had to stop flying just
after one year of taking off.
Economists say private airlines
die young because they have wrong assessments about the domestic aviation
market. The reports about the sky high number of 12 million passengers in 2011
provided a wrong panorama about the market. It made investors think that the
market was really very lucrative, thus urging them to pour money into the
business field.
“In fact, only 3 million out of
the 12 million passengers a year traveled by air. Of this amount, only one
million are regularly travelers. As such, the market is not big enough for so
many airlines to earn money,” an expert said.
The appearance of many airlines
in the small aviation market explains why the air tickets in Vietnam are
getting cheaper, even though the government has set a much higher ceiling for
the airfare. This means that airlines now can set up the airfares at higher
levels, but they dare not do that in the stiff competition with redoubtable
rivals.
Previously, many businessmen
booked business class tickets in order to have the opportunities to discuss
business with partners. But nowadays, they tend to book the seats at first
class compartment and take a nap while waiting for the arrival.
Especially, many people said they
could book tickets at low prices on the days just before the departure time.
Meanwhile, in principle, they have to pay higher if they book tickets at the
moments closer to the flight departure.
The appearance of Vietjet Air and
Air Mekong has made the market, which once comprised of Vietnam Airlines, Vasco
and Pacific Airlines, more competitive.
The competition has become so
stiff that Vietnam Airlines, a traditional airline, which did not intend to fly
as a budget airline, now has to change its mind and is offering different
ticket prices, including low cost tickets as well.
In fact, Vietnam Airlines
admitted that the air carrier finds it difficult to make profit with the domestic
flights, while it has to earn money from many other services, including the
land services.
It seems that every operational
airline has found its reasonable market segment. High income earners or
passengers on international air routes would book flights with Vietnam
Airlines. Jetstar Pacific, positioned itself as a budget airline, and Vietjet
Air serve popular customers. Air Mekong has advantages in niche markets such as
the air routes to islands and the Central Highlands. Meanwhile, VASCO provide flights
on short distance routes
Because of the big difficulties
in the aviation industry in 2012, in 2012, the budget airline Jetstar Pacific
nearly did not run advertisement campaigns, but it “flew in quiet.”
Jetstar Pacific’s General
Director Le Hong Ha, when asked how the airline can provide flights at really
low costs, said: “We have cut down all kinds of expenses as much as possible.”
Elaborating on this, Ha said that
Jetstar Pacific develops in-land services with its own equipment instead of
leasing equipment from Vietnam Airlines or airports. It also tries to fix
problems with its own engineers. And especially, even pilots and stewardesses
have to take some extra works.
Pham Huyen
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