AIRLINES Vietnam Airlines
“To meet a predicted rise in travel demand, Vietnam Airlines has evaluated the feasibility of new operations to potential destinations in north-east and south-east Asia, and we have studied serving additional destinations in Europe and the US as well,” explains Trinh Ngoc Thanh, EVP at Vietnam Airlines. The south-east Asia market remains especially robust, some six million passengers flying with Vietnam Airlines in 2015, a 15% hike on 2014. The growth trend is expected to continue in 2016 but Thanh warns that it is a highly competitive market with many regional competitors in the form of both traditional airlines and low-cost carriers. Carving out a niche will be difficult but not impossible with Vietnam’s strong tourism market and healthy domestic economy important elements in Vietnam Airlines’ offering. Indeed, the domestic market is significant to future prosperity and the 20% growth rate in traffic figures in 2015 is likely to be replicated in 2016, assuming economic predictions are accurate. Meanwhile, Vietnam is relatively well-
connected to China, an enormous market potentially, with the airline’s total traffic between the two countries reaching 1.1 million passengers in 2015, up 27%. The airline operates regular services to five main Chinese destinations – Beijing, Shanghai Pudong, Guangzhou, Chengdu and Hangzhou – as well as charter services to 18 destinations. New aircraft will play their part in helping the airline to meet this booming demand efficiently. “Vietnam Airlines is the first airline in Asia to receive and operate the Boeing 787-9 and Airbus A350-900,” says Thanh. “This is an important development for Vietnam Airlines and will modernise the fleet and improve the quality of services. The new generation of aircraft provide a 20% fuel saving, lower maintenance cost per hour and a higher operational efficiency and will serve the expansion plan in long- haul routes in the long term.”
New corporate identity Eventually, the airline’s fleet – currently 87-strong – will benefit from 19 787s and 14 A350s. All aircraft will feature a new livery, part of a strategy to introduce a new corporate identity and brand image. Vietnam Airlines is also a member of the SkyTeam alliance, which Thanh acknowledges will be important to the airline’s route development plans in the future, particularly in international markets. “Thanks to SkyTeam membership, the competitiveness of Vietnam Airlines has gradually been enhanced, the sale capacity and market share has been improved,” he adds. Thanh points out, though, that Vietnam Airlines must continue to consider its own
24 ISSUE 3 ROUTES NEWS 2016
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Noi Bai International Airport in Hanoi
direct connections to new destinations in the future. Where that clashes with another SkyTeam member, it will require the airlines to negotiate to co-ordinate frequencies and schedules to meet market needs.
Grounded in reality Many challenges remain, of course. While the years ahead may seem paved with gold for Vietnam, aviation infrastructure has to keep pace if the airline sector is to remain ahead of the curve. Tan Son Nhat Airport in Ho Chi Minh is a case point. The gateway is expected to be overloaded in the next few years and is out of alignment with the fleet development and traffic growth plans of Vietnam Airlines. Thanh reports the carrier has reported the issue to relevant authorities, including the Civil Aviation Administration of Vietnam and the Airport Corporation of Vietnam and has asked them to search for an appropriate solution. Other airports throughout Vietnam are in need of some improvement if they are to support the development of the country’s air transport sector fully.
A bright spot is Noi Bai International
Airport in Hanoi, which has recently welcomed a new terminal and typifies the forward momentum Vietnam is experiencing. All in all, Vietnam Airlines has much to
look forward to in the short and medium term. It is performing above expectations and attracting new investors. With oil prices falling, a populous and increasingly affluent country as its base and regional demand for air traffic backing up its home base, the sky really is the limit. “With a product and service upgrade to
international standard, a new corporate identity strategy and the introduction of new generation A350/787 aircraft, Vietnam Airlines is becoming one of the leading airlines in Asia, ‘reaching further’ in the aviation industry as well as enabling the country to comprehensively participate in the global economy,” says Thanh. £
The new-age airline
VietJetAir is the local competitor for Vietnam Airlines and operates 32 aircraft to 22 destinations on 38 routes. It is also planning to expand what is so far a limited operation in the south-east Asia region with 129 aircraft on order as it aims to fulfil its mission to lead the Vietnam aviation industry into a new era. The value carrier’s strategy is based on punctuality, affordability, a friendly service and easy-to-use online booking and purchase systems. In fact, it has already won several awards for its innovation and service. The airline’s quirky nature can be seen in its choice of aircraft livery, with each one of its fleet spectacularly adorned in eye- catching design. VietJetAir is among only three airlines in the world (along with American Airlines and Qantas) to have an aircraft decorated with characters from the Disney animation Planes. Local movie stars, the national
tourism logo, the Pepsi logo and the airline’s cabin crew feature on other aircraft while plans are in the pipeline to cooperate with corporations including Samsung and Toyota.
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