Tourism Indochina: AirAsia Causes Concern for Vietnam Airlines

Tourism Indochina: AirAsia Causes Concern for Vietnam Airlines

AirAsia Berhad is a Malaysian-based low-cost airline. AirAsia is Asia's largest low-fare, no-frills airline and a pioneer of low-cost travel in Asia. AirAsia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines Thai AirAsia and Indonesia AirAsia have hubs in Suvarnabhumi Airport and Soekarno-Hatta International Airport respectively. AirAsia's registered office is in Petaling Jaya, Selangor while its head office is located in Kuala Lumpur International Airport. Air Asia plans to open ASEAN regional headquarters in Jakarta by August or September 2011. The airline itself will maintain its headquarters in Kuala Lumpur for the time being.

AirAsia won the Skytrax World's best low-cost airline award in 2007, 2009, 2010 and 2011. It has the world's lowest operating costs at $0.035/seat-kilometre in 2010. It is also the first airline in the region to implement fully ticketless air travel system.

Vietnam Airlines Company Limited, trading as Vietnam Airlines is the national flag carrier of Vietnam. Founded in 1956 under the name Vietnam Civil Aviation, the airline was established as a state enterprise in April 1989. Vietnam Airlines is headquartered in Long Bien, Hanoi, with hubs at Noi Bai International Airport and Tan Son Nhat International Airport. The airline flies to 46 destinations in 19 countries, excluding codeshared services.

Vietnam Airlines was officially formed in 1996, after bringing together several service companies. The company is overseen by a seven-seat management board, members of which are appointed by the Vietnamese Prime Minister. Vietnam Airlines was the major stakeholder in Vietnam's second largest carrier, Jetstar Pacific Airlines, but its share has been transferred to the Ministry of Finance, then subsequently, to the State Capital Investment Corporation.

With the core activity of the airline being passenger transportation, Vietnam Airlines also earns revenue from catering and the maintenance and overhauling of aircraft through a number of its subsidiaries. The maintenance and overhauling of aircraft is handled by Vietnam Airlines Engineering Company (VAECO), while the former is performed by Noibai Catering Services Join-Stock Company and Vietnam Air Caterer, who cater airlines that use Vietnam Airlines’ hubs. The airline also controls and operates its cargo division, Vietnam Airlines Cargo, using the airline’s luggage hold on its passenger fleet, as well as a number of dedicated aircraft. Vietnam Airlines owns 100% of Vietnam Air Service Company (VASCO)—a regional airline in southern Vietnam, and 49% of Cambodia Angkor Air—the national flag carrier of Cambodia.

The airline is ranked as a 3-star airline according to the independent research consultancy firm Skytrax. Vietnam Airlines became a member of SkyTeam on 10 June 2010, making it the sole Southeast Asian carrier to join that alliance.

Tourism Indochina: AirAsia Causes Concern for Vietnam Airlines:
(Tourism Indochina:Date : 2010-03-20): AirAsia’s plan for a joint venture with a local Vietnam carrier has jolted a nervous Vietnam Airlines into action, urging the government this week to stop the move.

Last month, the Malaysian budget carrier purchased a 30 percent stake in Vietnam’s local VietJet Air. The carriers announced soon after joint venture plans for a new budget airline which was approved by the Ministry of Transport.
According to Thanh Nien Daily, VietJetAirAsia will operate both international and domestic flights starting May.

However, in a letter to Prime Minister Nguyen Tan Dung, Vietnam Airlines asked the government to prevent the venture from materialising.

The carrier said AirAsia’s stake in VietJet was only a ploy to enter the domestic market.

Vietnam Airlines said foreign carriers such as AirAsia and Jetstar were taking advantage of the government’s 30 percent cap on foreign ownership in a local airline.

It said the trend of foreign airlines coming into the country to purchase stakes in local carriers was bound to harm the local industry.

If the venture goes ahead, Vietjet AirAsia will compete directly with Jetstar Pacific, who has not raised any objection to the planned venture. Source ETB


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