Vietnam’s private airlines still learn to fly

Indochina Airlines has to stop its operation after one year of flying, Vietjet Air has delayed the launching of the first commercial flight for several times, while passengers of Air Mekong complain about the services. Experts say there are still many things private airlines need to learn in order to fly.

In 2007, the aviation market welcomed the establishment of a series of private airlines, namely Indochina Airlines, VietJet, Air Mekong, Trai Thien and Blue Sky. Except Blue Sky which has been rarely mentioned because it has not revealed the flight plan, all other air carriers have problems.

VietJet is the first private airline which got the flight license in December 2007. At first, the air carrier planned to launch its flight in late 2008. However, it then delayed the plan to March 2009, then to October 2001. After that, the air carrier decided to make another 5-month delay, but once again, it failed to implement the plan. Most recently, the air carrier has promised to take off in 2011.

As such, three years after getting the license , the first private airline still can only fly… on paper. VietJet has decided to sell 30 percent of its stakes to Air Asia to operate under the name of VietJet AirAsia.

Facing the same fate, Trai Thien Airline, which obtained the license in October 2009, may not be able to take off, as its staff accuse the air carrier of refusing to pay salaries, while key staff have left for other jobs

Indochina Airline is the name which was mentioned in most of discussions about the airlines. Taking off on November 25, 2008, the airline then had to stop operation just only one year and it is now awaiting the official registration for bankruptcy.

In 2010, people once put high hope on the rise of private airlines, when Air Mekong announced its flight plan in October. However, on November 3, the air carrier had to cancel the flights because there were only 10 passengers.

An aviation expert said that three most important factors for an airline are the qualified staff, financial capability and aviation experience.

It is now not easy to find the staff with experience and knowledge about aviation business in Vietnam. Meanwhile, only Vietnam Airlines, the national air flag carrier, has advantages in its human resources.

Regarding the financial capability, the initial chartered capital of every private airline is about 500-600 billion dong. Meanwhile, private airlines need huge capital to pay for fuel, chartered aircrafts and pilots

“All three factors are lacking at private airlines, which is a big problem. Airlines need to have big financial capability in order to overcome difficulties in the first 2-3 years of operation,” the expert said.

Meanwhile, airlines also need experience to set suitable business strategies. Jetstar Pacific, for example, has decided to turn into a budget airline in order to compete with the giant Vietnam Airlines, which has the big advantages of a state owned enterprise.

The expert related that the airlines in Cambodia could only fly for a short time before going bankrupt, or went bankrupt before taking off. Indonesia has tens of airlines established every year. Of these airlines, 50 percent have never taken off, while the majority of others do not operate effectively.

A representative from the Civil Aviation Authority of Vietnam has revealed that from 2012 to 2015, the agency will grant licenses to two air carriers which develop domestic and international air routes, one airline specializing in carry cargo, and two general airlines.

Source: VnExpress


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