Vietnam has inked air transport cooperation agreements and pacts with 58 countries and territories but benefits remain beyond reach due to lack of competitiveness.

Continental Airlines is the third US carrier, after United Airlines and American Airlines that operates flights to Vietnam under a bilateral aviation pact.

United Airlines have launched direct links between the US and Vietnam while American Airlines has cooperated with Vietnam Airlines to run code-share flights.

But, the Vietnamese national flag carrier has yet to exploit the US market. “The carrier cannot fly directly to the US this year,” a leader said.

One of major reasons is lack of aircraft. The total aircraft fleet of three Vietnamese carriers, including Vietnam Airlines, Pacific Airlines and VASCO is 47 aircraft, but they own only 42%.

Lack of capacity is the main reason why Pacific Airlines refused the rights, granted by the Vietnam Civil Authority of Aviation, to fly to Frankfurt in Germany and Nagoya in Japan last year.

The shareholding carrier has transferred the rights to Vietnam Airlines.

Losing out regionally

Vietnamese carriers are also losing out in the regional ‘no-frills’ sector as well to foreign competitors, who are already up and running, taking full advantage of the niche market.

Tiger Airways is now operating 13 weekly flights on the Vietnam-Singapore route compared to seven when it started the service in mid-2005.

Thai AirAsia has seven weekly flights on the Hanoi-Bangkok link.

Vietnam Airlines which previously held an 80% stake in Pacific Airlines intended to transform the carrier into a low-budget one. But, the plan failed after Pacific Airlines underwent an ownership restructure.

The carrier then turned its eye on VASCO in which it is a major shareholder but the plan appears infeasible as VASCO continues to struggle against huge spending on pilot and aircraft leases, along with gasoline imports.

Nguyen Xuan Hien, general director of Vietnam Airlines, said his carrier had to wait for at least another three years to launch low-cost flights.

Nguyen Tien Sam, deputy minister of communications and transport confirmed Vietnam must work out urgent strategies to boost the air transport industry.

Establishing new carriers, developing aircraft fleets and improving infrastructure are necessary to sharpen competitiveness, Sam said.

Source: Nguoi Lao Dong - Translated by Thanh Hang