Vietnam Airlines battles with ‘upstart’ Vietjet
14-09-2015 09:46:35+07:00
Vietnam Airlines battles with ‘upstart’ Vietjet
The Vietnamese aviation market is witnessing stiff competition between Vietnam Airlines, the national flag air carrier, and Vietjet Air, the emerging player. Jetstar Pacific is also a formidable rival.
Expanding fleets has been part of the airlines’ development plans. Vietnam Airlines now schedules flights between Hanoi and HCM City with the “five-star” Boeing 787-9.Prior to that, the air carrier put into operation Airbus A350, one of the most modern aircrafts in the world, in July.
Vietnam Airline’s CEO Pham Ngoc Minh stated that in 2015-2018, Vietnam Airlines’ fleet would be replaced with Airbus A350 and Boeing 787-9.
Vietjet Air, the only private airline in Vietnam, has also announced its plan to upgrade the fleet. The number of aircraft owned by the airline has increased from six to 26 just in the last six months.
Meanwhile, Jetstar has received two new A320s, bringing the fleet to a total of 11 aircraft.
According to SkyTrax (Airline and Airport Reviews and Quality Rating), most of Vietnam Airlines’s ground and air services can meet 4-5-star levels.
The service quality in 2013 and 2014 was good with 5.4/7 satisfaction scores.
Vietjet Air, though operational since 2011, has launched service quality upgrading programs, including ‘courtesy service’ with the focus on assisting older, pregnant and child passengers, and Skyboss, which targets high income earners.
Two-pole position?
Analysts noted that Vietnam Airlines, which once dominated the domestic aviation market, has to share the market with other air carriers.A report from the Civil Aviation Authority of Vietnam (CAAV) shows that Vietjet Air, a new player in the market, has served 9 million passengers and carried 65,000 tons of cargo with an average growth rate of 41 percent and 20.8 percent, respectively, in the 2012-2014 period.
In 2014, the private air carrier carried 5.4 million passengers with the average seat occupancy rate of 89 percent. Now it holds 29 percent of domestic market share.
Meanwhile, Vietnam Airlines’ market share fell by 1.9 points for international passengers in the last seven months compared with the same period last year, and 9.5 points for domestic passengers.
Analysts noted that in the coming years, the domestic aviation market would witness a fierce battle between Vietnam Airlines and Vietjet. However, they do not think the two-pole position will rule the market.
Vietnam Airlines remains a giant compared with Vietjet. It has more powerful financial capability, and many years’ experience. It is a big shareholder in Jetstar Pacific. And it enjoys great advantages over other rivals thanks to the comprehensive logistics services which bring high profits.
