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Seng Lim

AirAsia To Establish Joint Venture Airline In Vietnam

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Indochina Airlines stopped flights in November lastyear due to losses.

 

No wonder, I was missing the Czech TSA 737-800 so far...

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National carrier Vietnam Airlines has requested the government to prevent Malaysian low-cost airline AirAsia from forming a new budget joint-venture in Vietnam.

 

According to Vietnam Airlines, AirAsia’s acquisition of a 30 percent stake in local VietJet Air last month was only a move to help the Malaysian company enter the domestic market.

 

As it’s difficult to expand their business to overseas markets, foreign carriers often try to invest in a local carrier, Vietnam Airlines said in a letter to Prime Minister Nguyen Tan Dung.

 

Although the government has set a 30 percent cap on foreign ownership in a local airline, the loophole is that the regulation applies to all foreign investors, including airlines. Jetstar, and now AirAsia, have taken advantage of the loophole to form joint ventures in Vietnam and this trend is bound to harm the local industry, the national carrier said.

 

VietJet Air, the first private airline to be licensed in Vietnam, said last month the Ministry of Transport has approved its joint venture with AirAsia.

 

AirAsia said last month that the new budget airline, VietJet AirAsia, will operate both international and domestic flights starting May.

 

Analysts said AirAsia’s investment in VietJet Air would help the local airline launch its service soon. VietJet Air received its license in 2007 but has delayed its first commercial flight many times since.

 

Vietjet AirAsia, if finally established, will compete directly with Jetstar Pacific, the first low-cost airline in the country.

 

Jetstar Pacific has not raised any objection to the co-operation between VietJet and AirAsia.

 

Qantas Airways Ltd., Australia’s largest airline, holds a 27 percent stake in Jetstar Pacific.

 

 

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Looks like Vietnam Airlines is making Tony Fernandes feel at home - they are behaving exactly the same way as MH is behaving! :rolleyes:

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Looks like Vietnam Airlines is making Tony Fernandes feel at home - they are behaving exactly the same way as MH is behaving!

I concur with you. Same mentality. Sad, isn't it?

 

I hope VietJet plan goes without much trouble. Once take off, AK must make sure to piss off VN kaw kaw punya!

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vietnam airlines do the right thing :clapping:

 

Why ? Can you elaborate ? :huh:

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Why ? Can you elaborate ? :huh:

 

simple. they are a bunch of fickle minded people just like another local carrier in Malaysia. they want to protect their market, and they only believe in monopoly. probably the first ever game they played was monopoly? they fear competition and fear that there could be someone else who can pose a threat to their dignity. come on, it's time the world wakes up. with the never ending financial crisis all over the world, many have opt to go low-cost, not only when it comes to flight tickets, but also all other essential goods (you can see the blossoming of Tesco, Giant, Carrefour products in many households nowadays). too bad, we can blame them much. if their politicians also seem to think along that same frequency, no one will gain anything out of it. probably they just have to move on and find other avenues where they can develop their market.

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Sri Ramani,

 

I agree with your points, therefor:

 

Again, I ask Mohd Sukri: why is Vietnam Airlines doing the right thing in protesting ? :huh:

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simple. they are a bunch of fickle minded people just like another local carrier in Malaysia

Your line of reasoning quite agreeable

However, if you think of them as being "fickle minded" - oh boy !! :p

Having manipulated bailout after bailout and billion after billion whilst claiming "no government assistance", doesn't gel very well with understanding of fickle mindedness. Well, my understanding of it anyway :)

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The Civil Aviation Administration of Vietnam has banned local carriers from using brands and logos of foreign airlines for their services.

 

Foreign airlines are also not allowed to directly control business plans, revenues and profits at a local airline, Lai Xuan Thanh, deputy head of the administration, said Sunday.

 

The administration is trying to tighten control over foreign-invested airlines in Vietnam and prevent them from reporting fake losses in revenue, Thanh said.

 

The decision came after VietJet Air, the first private airline to be licensed in Vietnam, sold a 30 percent stake to Malaysia’s low cost carrier AirAsia and planned to name its new joint venture VietJet AirAsia.

 

Thanh was quoted by local news website VnExpress as saying AirAsia’s acquisition of the stake was legitimate but VietJet Air needs to think carefully about using the brand of its foreign partner.

 

He also asked low cost carrier Jetstar Pacific Airlines to report its plan to change trademarks or it would not be allowed to open new routes.

 

Local carrier Pacific Airlines was renamed Jetstar Pacific Airlines in May 2008 under a branding agreement with Jetstar Airways, which is a subsidiary of Australia-based Qantas Airlines.

 

The Civil Aviation Administration of Vietnam has several times warned Jetstar Pacific Airlines against using the “Jetstar” logo or “Jet” and a star image, saying these trademarks could cause people to confuse the Vietnamese airline with Australian carrier Jetstar Airways. But Jetstar Pacific Airlines has said that under the branding agreement, it has the right to use Jetstar’s brand name.

 

 

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So if VietJet cannot name themselves as VietJet Airasia, what name will they give?

 

I have a suggestion: AirChâu Á (Châu Á = Asia)

 

 

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With Air Mekong taking flight I wonder whether the plan to start a Vietnam version of AK is still on track. Really hope to visit Vietnam next year. :(

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VietJet AirAsia is definitely not on track. If it was, their first flight would have been in July 2010. The postponement of more 2011 Airbus A320 deliveries also indicate that AirAsia Group does not think this problem will be resolved anytime soon.

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Yes. I read an AirAsia report from an investment bank which was issued on 17 August 2010 recently (right before AK announced its Q2 2010 result), it mentioned:

 

However, resistance prevails on route expansion and high barriers to entry to certain countries: e.g., AirAsia’s repeated failure to start a JV airline in Vietnam and the Philippines. This has proven to be a constraint on AirAsia’s ability to expand.

.

.

.

Overall, we are enlightened by the recent news flow from AirAsia:

(1) deferred aircraft deliveries and reduce pace of growth,

(2) called off the Vietnamese JV to start a LCC (citing inability to replicate business operations the way it is accustomed to), and

(3) expedite the disposal schedule of older B737-300 aircraft in its fleet. It gives us relative calm that the management has matured to reality and reduced appetite for risk.

.

.

.

Barriers against new entrants are high as we have seen two repeated failures by AirAsia to setup a JV in Vietnam.

So, we can safely assume that VietJet Asia is again went down the drain thanks to the protectionism by the Vietnamese government.

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It gives us relative calm that the management has matured to reality and reduced appetite for risk.

That is a gem if ever there is one :rofl:

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So, we can safely assume that VietJet Asia is again went down the drain thanks to the protectionism by the Vietnamese government.

Well I think that AirAsia will just put this on a back burner for now. Maybe they should now focus on Cambodia AirAsia, Laos AirAsia, Australia AirAsia, etc. I think that if they can get the necessary approvals, Australia AirAsia can be another potential winner...

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This is their latest update to Bursa:

 

Following the announcement on 31 May, 2010 by AirAsia Berhad (“AirAsia") on the above matter, AirAsia wishes to update that AirAsia and Sovico Holdings Joint Stock Company are working out a suitable structure for the proposed venture in Vietnam which includes the option of AirAsia initially providing operational and management services to Vietjet Aviation Joint Stock Company for a prescribed period of time before an investment is made.

 

This announcement is dated 18 August, 2010.

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Vietnam AirAsia is on.

 

Graduation photos of the first batch of Vietnam AirAsia cabin crew, stolen from Thai AirAsia CEO's FB page.

 

254792_10150268595698803_574998802_8017651_3786524_n.jpg

 

310683_10150268597603803_574998802_8017681_2236736_n.jpg

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Finally it materialiezed !!! :yahoo:

 

Enjoy your job and flights, guys & gals !!! :pardon:

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The question now is, when is the first A320 coming? What routes? What color livery? When are they starting ops?

 

For some reason I think Vietnam has restrictions on Red, so maybe we might have a chance! Remember the failed Vina AirAsia was supposed to be blue.

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