Private airlines winged with investment projects to fight for bigger market share
No one thought that Air Mekong and Vietjet Air would be able to survive the stiff competition in the aviation market, once the two air carriers prepared for their take-off.
Prior to that, another private air carrier – Indochina Airlines – had to leave the market after one year of operation.
However, both the two airlines have been flying well since the day they took off and they have been threatening the dominating position of Vietnam Airlines in the domestic aviation market.
Air Mekong has announced that it plans to use Airbus A320s for the flights between Hanoi and HCM City in some months. The move, in the eyes of analysts, showed the determination of the airline to seek a bigger market share.
Doan Quoc Viet, Chair of Air Mekong, said Air Mekong may put A320s into operation from December 2012. If everything goes smoothly, Air Mekong fleet would comprise of six aircrafts, including four CRJ900s, each of each can carry 90 passengers, delivered in August 2010.
A320 is a modern aircraft capable to carry 180 passengers, which especially is suitable to medium distance flights. A320 is also the aircraft model being used by both Vietnam Airlines and Vietjet Air.
To date, with CRJ900s, which allow to provide flights in a flexible way, Air Mekong has cemented its firm position on the market as the provider of the flights to islands, central region and the Central Highlands.
At present, Air Mekong provides 30 flights a day with 13 air routes to nine domestic destinations, including Hanoi, HCM City, Vinh, Buon Ma Thuot, Pleiku, Da Lat, Quy Nhon, and Con Dao and Phu Quoc islands.
Air Mekong has provided approximately 20,000 safe flights over the last two years, carrying 1.3 million passengers.
Viet, while declining to provide exact details about the business results, said that the turnover of the airline has been growing steadily by 10-12 percent per annum on all the current air routes.
Most recently, Eximbank, one of the biggest joint stock banks in Vietnam, announced the deal of buying 11 percent of stakes of Air Mekong in June 2012.
Prior to that, experts predicted that Air Mekong would join the competition on the backbone air routes, including the Hanoi – HCM City one, sooner or later, because this proves to be the best way to expand the domestic market share.
In fact, according to Dau tu, the initial successes of Vietjet Air, the airline with low operation costs, which is flying with A320s, is one of the reasons which have prompted Air Mekong to decide to join the backbone air route network.
A report by Vietnam Airlines, which is dominating the domestic market, showed that the joining of Vietjet Air to the domestic market has led to the fall of the market share held by the big air carrier in the two most important routes Hanoi-HCM City and HCM City-Da Nang.
Providing the first commercial flight in late 2011, Vietjet Air has been well known for its young service staff and economical price policies. The private air carrier is exploiting five air routes that link the most important points including HCM City, Hanoi, Da Nang and Nha Trang.
Vietjet Air has revealed its plan to kick off the new air route to Hai Phong in October 2012, Phu Quoc Island in December, and international air routes.
Vietnam Airlines’ market share has dropped from 77 percent in late 2011 to 74.4 percent in May 2012.
