${bigcity_Ho_Chi_Minh_City:”Ho Chi Minh City”}, Vietnam – Though the country has opened its sky to both national and private airlines, private carriers are still having difficulty competing with the national carriers. Since the first license for private airlines to operate in Vietnam was granted by the Vietnamese Government almost four years ago already, five private airlines have been licensed to fly their routes in the country. Indochina Airlines, VietJet Air, Trai Thien Air Cargo, Blue Sky Air and Air Mekong are all private carriers authorized to operate in Vietnam. But of the five, only Air Mekong is operating its flights on domestic routes. The other four airlines are still grounded and unable to fly their planes to any destination. VietJet Air is the first private carrier to earn its license to run in Vietnam.

It sold a 30% stake to Malaysia’s low-cost airline AirAsia in February last year. It was supposed to launch its maiden flight in August last year under the name VietJet AirAsia but the Civil Aviation Authority of Vietnam or CAAV issued a warning to the airline preventing it from using trademarks that could be confused with AirAsia. Because of this, VietJet Air has postponed its schedule for its maiden flight and has not yet declared a new plan for its supposed momentous event. According to Vo Huy Cuong, head of the CAAV’s Air Transport Department, the airline has in fact been unable to obtain its Air Operator’s Certificate (AOC) which prevents it from flying to any destination. Tra Thien Air Cargo got its license to operate in Vietnam in October 2009 as the country’s first private cargo carrier. It was supposed to take its first flight between ${bigcity_Hanoi:"Hanoi"} and Ho Chi Minh City in June 2010 carrying garments, electronics and foodstuffs from companies as its potential clients.

Moreover, it planned to expand into a fleet of 10 freighters to transport export and import goods of local companies. But according to the own company’s deputy director Le Giang Long, the airline has been having some financial problems, even unable to pay its employees their salaries. Worse, the carrier is said to have an inefficient staff. Blue Sky Air is quite different from the other private airlines operating in Vietnam since it utilizes helicopters for its flights. With a goal to create a one-of-a-kind airline business in the country, it offers an in-flight tourism service for business class passengers. It has a target of 20 tourist destinations and has the ability to take off and land in several topographic and vacation spots. But sadly, it hasn’t began its operations yet. Indochina Airlines on the other hand, supposed to be the first private carrier to operate in Vietnam, put on hold its business in the middle of 2010 because of serious debt issues. Reports from the online newspaper VnExpress stated that as of early October 2010, the airline had arrears amounting to VND31 billion (US $2.05 million) in fuel costs, air tickets and in-flight food, including arrears costing VND21 billion from the fuel supplier Vietnam Air Petrol (Vinapco). It was given a deadline of two and a half months by the Air Transportation Department to obtain its certificate from CAAV or be banned altogether from running its services in the country. The carrier was given until mid-October to clear all its debts but so far, Indochina Airlines hasn’t stated anything on the matter yet. Because of all this, Cuong was able to assume that “…private carriers have limited capabilities in terms of finance and management.” One of the other major reasons for private airlines having difficulty operating in Vietnam is the fierce competition with the national carrier Vietnam Airlines and the low-cost carrier Jetstar Pacific which boosts sales with lower air fares. Vietnam Airlines has offered discounts of up to 50% on domestic flights, while Jetstar Pacific sold 1,00 tickets for only VND100,000 between September 9-October 10. Air Mekong is the only private airline operating in the country but is facing numerous complaints from its passengers and ticket agents for canceling its flights. It has suspended its flights to ${bigcity_Da_Nang:"Da Nang"} only two months after it started its business due to a “lack of profitability.”

But refusing to be beaten by the national carrier, Air Mekong aims in bettering its service, planning to add more seats to its planes, especially during the peak season for domestic flights. Moreover, it will create more flight destinations from Ho chi Minh City to the central Highland’s Buon Ma Thuot and Pleiku, from one to two daily flights from each route, while decreasing its Ho Chi Minh City-Con Dao flights from daily to three flights per week. The Vietnam Competition Council has stepped into the issue of jet fuel debt between the airlines and the supplier, stating that Vinapco has taken advantage of its monopoly over the business and flouted the Law of Competition without justification. It cut its supply to the airlines over the debate of fuel price, causing the latter to cancel their flights to a number of destinations, leading to unhappy customers and a losing business. But apart from all these problems facing private airlines, there is always the opportunity to get back up and even step up to the field. Jetstar Pacific’s low-cost scheme has opened up the possibility of being able to compete in the local airline business. In fact, according to Ha Dung, CEO of Indochina Airlines, “…the local aviation had improved.” The said carrier is planning to increase its capital to a whopping VND500 billion ($25 million) to purchase more airplanes and hire more and efficient pilots and flight attendants. This is not without challenges though. The leading national carrier Vietnam Airlines is again foreseen to have an increase in sales and services from local passengers and businesses because other kinds of inland and waterway transport were still underdeveloped. This, according to Managing Director of Trai Thien Air Cargo Do Anh Tuan.