The airlines that failed to take off in Vietnam
Indochina Airlines, for example, shut down just after a short time of operation. It was the second private airline licensed in Vietnam and the first private airline providing commercial flights in 2008 with two chartered Boeing 737s. In its heyday, the airlinehad six domestic air routes.
However, one year later, the number of air routes was cut to one – HCMC-Hanoi. This was attributed to the global economic crisis which led to a sharp fall in travel demand.
In 2011, the airline stopped providing flights because of a series of problems, including huge debts to partners and inability to pay workers. It officially disappeared from the map of Vietnam’s airlines in late 2011.
Air Mekong was the third private airline which tried to fly. It joined the market later than the other rivals – Vietjet Air and Indochina Airlines. Only in October 2010 did it provide the first commercial flight.
The Malaysian budget airline AirAsia is now planning to operate in Vietnam after previous three attempts. This has been cited as proof to show the attractiveness of the market, but analysts say the Vietnamese sky may not be welcoming for all.
Air Mekong started with four chartered Bombardier CRJ 900s, flying to eight domestic destination points.
In 2012, Air Mekong’s managers admitted the sluggish operation because of economic difficulties. Though its revenue in 2012 was higher by 7 percent than in 2011, the situation was still bad.
In late 2012, Air Mekong’s CEO Luong Hoai Nam resigned from the post just four months after taking the office. Just some days later, its fuel suppliers condemned Air Mekong for not paying debts.
In February 2013, the airline with red-headed cranes as a symbol had to stop flying and give four aircraft back to undergo restructuring. In early 2015, its operation license was revoked by the watchdog agency.
Pacific Airlines was the first joint stock airline in Vietnam with the capital contribution from the state. It was established in 1991 by the Civil Aviation Authority of Vietnam (CAAV) and four member companies which held 86.49 percent of stakes. Saigontourist held 13.06 percent and Tradevico 0.45 percent of the airline with VND40 billion in charter capital.
In 2007, the Australian Qantas negotiated with the State Capital Investment Corporation (SCIC) on the purchase of 30 percent of Pacific Airlines’ stakes, becoming a strategic shareholder of the air carrier.
Thanks to the investment capital from Qantas, Pacific Airlines underwent a restructuring process. However, it had to be renamed Jetstar Pacific.
At present, it has two big shareholders – Vietnam Airlines which holds 70 percent of capital and Qantas 30 percent.
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