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destinations an hour away. Vietnam’s membership in the Associa-
tion of Southeast Asian Nations (ASEAN) gives travellers visa-free
access to nine other countries. Budget airlines charging as little as
US$73 per ticket have replaced often rough, time-consuming bus
and railway travel within Vietnam.
“Since VietJet came to the market, the tickets became more
affordable to everyone, including farmers and students,” said
Phuong Hong, a Ho Chi Minh City-based hotel group commu-
nications manager who flies once a month, usually domestically
or within Southeast Asia. By land, she said. “the public transit for
long distance like Hanoi to Ho Chi Minh City is so terrible. If you
see the quality of the train, you will think of the year 1900. The
hygiene is not good.”
From 40-50 percent of people travelling between cities fly now
with the budget carriers rather than using land transit, said Ho Thi
Thuy Ly, a sales manager with Le Khoi Tourist in Ho Chi Minh City.
“ There are more and more departures, for example you can go at
6am and that way you go before other tourists
and get cheaper flights,” she said. “People love
discounts,” she added. Overseas-bound Viet-
namese tourists, Ho said, generally pick places
that they read about online, meaning China,
Japan and South Korea.
The impacts are visible, even audible. Five
years ago, at the Tan Son Nhat Airport in Ho
Chi Minh City, a deplaning passenger would wait behind two or
three other people at immigration. Now the lines easily run 10 or
more people deep. Some passengers behave crudely on flights
because they ’re not used to some of the cabin rules, she said, and
airline service people can be hard to find at airports, Phuong said.
Business travel market
Vietnam turned to export manufacturing in the late 1980s as a way
to expand its post-war economy. Business air travel has grown
since then along with foreign factory investment. Today cheap
land and labour draw investors mostly from developed regions
of Asia, helping drive GDP growth of 6-7 percent per year since
2012. Exports came to US$200 billion in 2017 with more expected
as Vietnam signs free-trade deals with major countries: Vietnam’s
ratification of the 11-member Comprehensive and Progressive
Trans Pacific Partnership trade deal will eventually give it tariff-free
access to export markets such as Canada, Japan and Australia.
The European Union expects to ratify a separate trade pact with
Vietnam this year.
Demand from just Taiwan, one of the top four investors in Viet-
nam, has spawned routes between Ho Chi Minh City and several
Taiwanese airports near industrial areas, said Tai Wan-ping, inter-
national business professor at Cheng Shiu University in Taiwan. He
cites a mature supply chain and a surge in demand from Japan for
products developed in Vietnam by Taiwanese firms. “Ho Chi Minh
City is an extremely important place for Taiwanese manufacturing,”
he said. “ There’s an indicator you can use. You’ll find that just about
all airports in Taiwan have flights to Ho Chi Minh City.”
Another indicator is that in August last year, Vietnam registered
its first business jet, an Embraer Legacy 600, the event organiser
and publisher Corporate Jet Investor says. That plane, operated by
the government, joins at least three other business jets that operate
in Vietnam, among them two Gulfstream G450s. A hotel-restaurant
and real estate group flies one of the Gulfstream aircraft.
Bamboo Airways’ official website calls the airline a “hybrid” of
budget fares and “high quality” service including routes designed
to connect more cities without transfers. But the airline declined
comment for this report, and business analysts in the country say
it may struggle to find space at airports.
“If you look at the airline business, it’s all about landing slots,” said
Fiachra MacCana, research head at stock brokerage company Ho
Chi Minh City Securities. “Unless you get sympathetic landing slots
from airports, who’s going to buy a ticket? Maybe the (Hanoi and
Ho Chi Minh City) airports will give them slots at five past midnight,
‘sorry, we don’t have the capacity for you in the daytime,’ so I don’t
think it’s going to be an easy run for them in any respect.”
Growth in traffic has put a “strain” on airports, business consul-
tancy Dezan Shira & Associates says. For that reason, the Transport
Ministry plans to spend US$15.4 billion by 2030 on developing 23 air-
ports with a view toward annual air traffic of 144 million passengers
by next year. Vietnam also got its first private airport in December: a
325-hectare space built by property firm Sun Group near the tourist
spot Ha Long Bay for 2.5 million passengers per year.
Competition is about airlines as well as airports. Flagship carrier
Vietnam Airlines stands to lead any newcomers because it can buy
aircraft in bulk at a discount for lease to other companies, MacCana
said. AirAsia expects more “liberalisation” of airline ownership in
Vietnam to help the aviation sector grow, its statement says. Foreign
airlines are deterred now by a 30 percent limit on foreign capital in
airline ventures in Vietnam, Dezan Shira says.
The other major carrier, VietJet, says on its website it has grabbed
45 percent of the domestic market in just seven years. But the
Transport Ministry ’s aviation agency put VietJet under special mon-
itoring in December for 18 days, domestic news website VnExpress
International reported. The carrier had logged seven safety-related
incidents, including five mechanical problems, over three months.
VietJet declined to comment.
There are more and more departures, for example you
can go at 6am and that way you go before other tourists
and get cheaper flights. People love discounts.
THUY LY, LE KHOI TOURIST
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