Domestic aviation market sees initial competition signal

After almost a half of year, Air Mekong on April 8 carried out the first plan of expanding distribution network through signing the strategic deal with Vietnam Post and Telecom Group (VNPT), accordingly VNPT will sell Air Mekong’s air tickets at nearly 18,000 post offices throughout the country, the VnExpress reported.

In return, Air Mekong will deliver postal packages for VNPT on domestic flights.

Doan Quoc Viet-Chairman of Air Mekong shared that the cooperation was a basis to expand cargo transportation by air in the future.

He revealed, with the strategic deal, the group will prioritize to use transportation services of Air Mekong and encourage its employees to join flights of Air Mekong on domestic routines.

Aviation is the specific business field, in which administration costs of air firms are much different. In addition, airfares still are under management and ceiling levels. So, enterprises should offer new plans to upgrade their competitive strength, specialists said.

In fact, expanding air ticket sales network is one of initial difficulties that all new carriers have to face. Therefore, the use of available facilities of VNPT or other partners to rapidly expand distribution network is the strategic solution Air Mekong as well as other firms such as Vietjet Air or Indochina Airlines should undertake.

Earlier, Jetstar Pacific signed an agreement of airfare payment via 1,100 post offices of VNPT, and also inked a deal with many banks to launch online air ticket sales.

Along with cooperating with partners, Air Mekong will publically compete with the giant Vietnam Airlines. Instead of this, the firm chose to provide services on busy and overloaded flight routines or other routines Vietnam Airlines is paying less attention.

With the above strategy, Air Mekong will minimize potential losses as newly joining the market. After three months of operation, Air Mekong reached over 120,000 passengers.

Previously, Jetstar Pacific also had restructured and chosen cheap price form to compete with Vietnam Airlines. By policies to minimize costs, Jetstar Pacific committed that its airfares were always 10% lower than other carriers whereby its market share was raised from 14% to 23% in 2010. The firm focuses on medium-income passengers who prefer economic air services.

Vietnam’s aviation market starts to see competitive signal despite the majority market share of 70% belongs to Vietnam Airlines. New firms like Jetstar Pacific, Mekong Air…are seeking branch markets and specially strategic cooperation to better serve demand of customers. – Vietbiz24

Tags: Vietnam aviation, Vietnam aviation industry, Vietnam aviation market