Vietnamese prime minister approves first private airline

Nov 30, 2007, 11:35 GMT

Hanoi - Vietnam's Prime Minister Nguyen Tan Dung has given the go-ahead to issue a license to the country's first private airline, VietJetAir, Transportation Ministry officials confirmed Friday.

'The prime minister has agreed in principle' to allow the company to operate, and assigned the Transportation Ministry to prepare the legal documents, senior ministry official Nguyen Van Cong said.

Domestic flights are currently provided exclusively by the government-owned flag carrier Vietnam Airlines, and its wholly-owned subsidiary Pacific Airlines. Tour operators and travelers have long complained about the absence of alternatives.

VietJetAir public relations' officer Robert Hugh said the company expected to launch operations within about one year. He said the delay would be due to a shortage of available aircraft to lease.

Hugh said the company would be a low-cost, short-haul carrier, serving domestic and some regional routes.

'Our strategy will be to go after overpriced or under-served routes, and there are quite a few available,' Hugh said. 'Hanoi to Siem Reap is very expensive. Hanoi to Hong Kong is both overpriced and under-served.'

Tourism industry experts say there are too few operators in Vietnam to meet rising demand on domestic routes.

'Tour operators in Vietnam often have to book tickets very long in advance due to the limited number of planes,' said Vu The Binh, head of the Travel Department in Vietnam's Administration of Tourism. 'Vietnam needs as many more domestic airlines as possible.'

The new company will have a licensed capital of 600 billion Vietnamese dong, about 38 million dollars.