Domestic carriers prepare for competition - Vietnam Airlines

Vietnam Airlines and Pacific Airlines will soon face new competition on it domestic routes from three new airlines.
VietJet Air, which received a licence for operation late last year, is in the process of leasing a Boeing 737-800 with 200 seats to run flights from HCM City - Da Nang-Hanoi in December.

Air Speed Up will obtain its licence this month. It has already leased three Boeing 737-800's and hired pilots to begin servicing the same route in October.

The newest airline, Phu Quoc Air, is finishing their procedures and preparing to submit its licence application to the Civil Aviation Authority of Viet Nam (CAAV) with an expected capital of VND600bil (US$37.5mil).

Phu Quoc Air will lease small airplanes, such as the Bombardier CRJ900 NextGen with 90 seats or ATR 72 with 70 seats, to serve short southern flights from HCM City to Rach Gia, Phu Quoc, Ca Mau and Can Tho.

It is expected that Phu Quoc Air will take off in the middle of next year.

To prepare for the new competition, Vietnam Airlines and Pacific Airlines have asked the Government to increase the ceiling price on flights from VND1.5mil ($97) up to VND1.7mil ($110) because of higher oil prices.

With the new ceiling level, ticket prices for long flights would rise 13-14%, while those on short flights by 20%.

"With the increased ceiling prices, the Government would like to encourage airlines to set up flexible prices to give more choice for customers," Ho Quoc Cuong, vice head of the CAAV's Transportation Department said.

Pacific Airlines has increased the percentage of its saver tickets from 70 to 85% for every flight.

The two airlines also plan to buy and lease more airplanes. By the end of the year, the national carrier Vietnam Airlines will have three more Airbus 320's, while Pacific Airlines will have more five airplanes.