return icon Vietnamnet.vn

MOT wants a more competitive aviation market

 VietNamNet Bridge – Jetstar Pacific, the first low-cost airline in Vietnam, will split from Vietnam Airlines, with the State still holding the controlling stake after equitization, a step of the plan to create a competitive aviation market.

VietNamNet Bridge – Jetstar Pacific, the first low-cost airline in Vietnam, will split from Vietnam Airlines, with the State still holding the controlling stake after equitization, a step of the plan to create a competitive aviation market.


relate news

{keywords}

Minister of Transport Dinh La Thang said the split will be implemented sooner or later.

The State will sell Jetstar Pacific’s shares to gradually reduce its ownership ratio in the low-cost airline. At this moment, Vietnam Airlines holds approximately 70 percent in Pacific Airlines.

Both Vietnam Airlines and Pacific Airlines are now under the same roof. However, there were two mergers and one split between them in the past.

In 1995, Jetstar Pacific was merged into Vietnam Airlines under the name Pacific Airlines. And in 2012, Jetstar Pacific once again belonged to Vietnam Airlines after the State Capital Investment Corporation (SCIC), which then held 70 percent of Jetstar Pacific, transferred the shares to Vietnam Airlines.

The State then decided to put Pacific Airlines under the management of Vietnam Airlines because it hoped the national flag air carrier would help the low-cost airline recover from a long period of significant losses.

In Vietnam Airlines’ five-year business development plan, Jetstar Pacific is mentioned as an inseparable partner. However, the split was inevitable.

Thang said once Jetstar Pacific leaves Vietnam Airlines, the Vietnamese aviation market will have three air carriers, including the privately owned Vietjet, which will help make the market more competitive and benefit passengers.

However, Thang still does not know when this will occur. In the immediate time, Jetstar Pacific still needs the major financial support from Vietnam Airlines, even though it has been recovering step by step.

“We hope that Jetstar Pacific will stop losses this year. If so, we will consider what to do next,” Thang said.

Tran Dinh Ba, an expert, applauding the decision to split Jetstar Pacific from Vietnam Airlines, commented that once the market becomes more competitive, passengers will get benefits.

Commenting about the Ministry of Transport’s decision to split Jetstar Pacific from Vietnam Airlines, an analyst said the watchdog agency wants to create a more competitive market with more service providers.

However, he noted that it would be not a bad idea if Vietnam Airlines continues to “hold” Jetstar Pacific.

It is a growing trend in Asia that a traditional airline also has a low-cost airline. Qantas, a traditional airline, for example, has its subsidiary – Jetstar – a budget airline.

Meanwhile, Singapore Airlines has recently set up two budget airlines – Silk Air and Scoot, and Thai Airways has regained control over Nok Air and set up Thai Smile.

The analyst noted that the business model that combines traditional and low-cost services will help air carriers better compete with rivals in all market segments, from high-cost, medium- and low-cost.

Vietnam Airlines, in its financial report released before it made its initial public offering in mid-November, also said that it might follow a “dual branding” strategy, i.e., Vietnam Airlines will target high- and medium-income passengers, while Jetstar Pacific will target the low-cost market segment.

The report also showed that Vietnam Airlines will pour more capital into Jetstar Pacific.

Thanh Mai

MORE NEWS

Vietnamese retail market appealing to foreign investors

The nation is becoming an attractive retail market for companies globally with many regional and global FDI investors recently revealing their plans to increase capital and expand distribution networks here.

Eel porridge evokes hometown nostalgia

A warm bowl of Quang-style eel porridge with a fragrant aroma not only can win the hearts of diners, but also create nostalgia for the Quang people who live far from home.

Vietnamese banks that 'disappear' from the market

Some banks used to be very popular, with hundreds of thousands of customers, but they gradually disappeared from the market because of many reasons.

Discovering Hanoi’s famous incense making village

The craft village with a tradition of more than 100 years impresses visitors for its space that is filled with vibrant colors such as blue, red, yellow, etc. of beautifully shaped bouquets of incense.

Vietnam to reassert its position on the world coffee map

Vietnam is the world's second largest coffee exporter, but its impact on the world coffee market is not commensurate with its position, experts say.

VIETNAM BUSINESS NEWS MARCH 27/2023

Coffee exports to Netherlands enjoy three-digit growth

Youngest female Vietnamese Associate Professor receives Kovalevskaia Awards 2022

Prof. Dr. Le Minh Thang on March 7, 2023 was presented the 2022 Kovalevskaia Awards 2022 by Prime Minister Pham Minh Chinh.

Third pedestrian street opens in Hue City

The Hai Ba Trung Pedestrian Street was opened on Sunday evening in Hue City, becoming the third walking street in the central province of Thua Thien-Hue.

Entertainment and cultural events of the week (March 27-April 2)

Entertainment and cultural events in Vietnam's major cities on March 27-April 2.

VIETNAM NEWS HEADLINES MARCH 27/2023

Vietnam wins 17 prizes at International Robothon 2023

K'Duong breaks three youth weightlifting world records

Vietnamese weightlifter K'Duong broke three youth 55kg world records during the 2023 International Weightlifting Federation (IWF) World Youth Championships on March 26 which is taking place in Albania.

Struggling hoteliers seek Government support to revive from COVID-19 crisis

Small- and medium-sized hotels in HCM City are struggling with low occupancy rates and labour shortages, and are in need of support to recover from a COVID-19-induced slump, according to the municipal Department of Tourism.

Lion Championship MMA returns, first fight in Hanoi on April 1

The second season of the Lion Championship mixed martial arts will be back with great fighters and frightening fights in April.

Driftwood space launches in Hoi An

The first ever wood recycle space – driftwood village’s studio – has been launched in the ancient’s Cam Ha Commune on the most favourite bicycle riding road connecting the Old Quarter and An Bang beach.

Hoi An to host International Choir Competition

The event has received registrations from 20 teams representing nine countries and territories, and will feature 13 events with eight grades held at the city’s theatre.
back_to_top