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Airlines shape up as new competition threatens market share

By Hong Chau   September 17, 2019 | 05:03 pm PT
Airlines shape up as new competition threatens market share
An aircraft of Vietnam Airlines seen in Noi Bai airport in Hanoi. Photo by Shutterstock/Karasev Victor.
Vietnam's carriers are providing better ticket policies and treating agencies better after new entrant Bamboo Airways began eating into their market share.

Since the beginning of the year, there has been no shortage of flight tickets on peak routes like Ho Chi Minh City to Hanoi, Da Nang, or coastal central town of Quy Nhon because of rising competition. Unlike in previous years, some carriers have even had to cut down the number of tickets they issue, ticket agencies in Ho Chi Minh City told VnExpress.

In particular, flagship carrier Vietnam Airlines, which had traditionally charged fares higher than all other airlines in the country, began offering flexible economy class ticket prices on par with budget carriers Vietjet, Jetstar Pacific and new entrant Bamboo Airways from the beginning of this year.

According to the Civil Aviation Authority of Vietnam's (CAAV) latest statistics, Bamboo Airways, which was launched in January, had gained a 7 percent market share in terms of number of flights by June, while Vietnam Airlines and Jetstar Pacific suffered corresponding losses to their market shares.

As of June, Vietnam Airlines accounted for nearly 51 percent of the domestic market share in passenger transport, down nearly 5 percentage points from 2018, taking into account Jetstar Pacific and VASCO, two affiliates in which it holds majority stakes.

Budget carrier Vietjet Air also suffered a 2.7 percentage point loss compared to last year, from 44 percent to 41.3 percent.

According to Ha, a ticket agency owner in Vo Gap district, HCMC, in addition to customers having more choice, airlines are treating businesses like his much better compared to previous years.

"Last year, we called the airline up numerous times but no one was there to answer the phone. Ticket issuing fees, which customers have to pay when ordering directly from the airlines’ websites, was also been levied on agencies," he said.

"However, the airline has withdrawn this fee this year, and have also been showing much more care when dealing with agencies."

Vietnam has six commercial airlines: Vietnam Airlines, Vietjet Air, Jetstar, VASCO, Bamboo Airways, and the latest Vietstar Airlines, which has yet to begin flying. Thien Minh Group, Vietravel Airlines and Vinpearl Air have all applied for licenses.

The nation’s aviation industry has been growing at the third fastest pace in the Asia-Pacific region, according to the International Air Transport Association (IATA). 

Local airlines served 38.2 million passengers from January to August, up 9.5 percent year-on-year, according to the General Statistics Office.

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