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Vietjet Air still grounded   2010-06-14 - VnExpress

The private airline Vietjet Air will be unable to take off as promised because it still has not completed all the necessary procedures. The airline needs to find another name for the joint venture Vietjet Air – Air Asia that can be accepted.

Air Asia now holds 30 percent of stakes in Vietjet Air
Vietjet Air has contacted Civil Aviation Administration of Vietnam (CAAV), requesting that it allow them to delay operation off until October 2010, because the airline needs some more time to settle problems relating to its sale, brand, personnel and fleet.


Vietjet Air previously planned to provide commercial flights under the name “Vietjet-AirAsia” after it sold 30 percent of the company to AirAsia. The name, however, is a matter of controversy. Many aviation experts claim that the name may lead to misunderstandings and travelers may mistake the air carrier for Air Asia. They also believe that the name does not reveal that this is a Vietnamese airline.


The case is reminiscent of the Jetstar Pacific case, in which the airline was told not to use the orange star and Jet logo because it could be mistaken for an Australian airline.


CAAV told Vietjet Air to rethink its brand and not to use logos and brands that might create misunderstandings.


A representative of Vietjet Air admitted to VnExpress that the biggest problem is branding. The air carrier has hired consultants to design a logo and brand, and this will take time.


“This is the main reason why we still cannot take off as planned,” he observed.


The Vietjet Air agreement to sell 30 percent to a foreign airline also raised protests. Two weeks after Vietjet Air announced the sale, Vietnam Airlines, the national flag air carrier asked the Government not to approve the deal.


According to Vietnam Airlines, AirAsia’s investment in Vietjet Air should be seen as a threat to Vietnam’s market. 


According to Vietnam Airlines, with 30 percent in Vietjet Air, AirAsia will be able to join the board of directors and manage the airline anyway it sees fit.


Vietjet Air is the first private airline granted a license (in December 2007). Its two main shareholders are Sovico Group and HD Bank. The airline initially planned to begin commercial flights in late 2008. However, the airline decided to delay for four months, because fuel prices sharply increased.


In March 2009, Vietjet Air again decided on a delay to October, and then agreed to another delay for five more months, until May 2010. Due to branding issues, the airline initially reported that it would not begin operation until August. In the latest news, the airline will now not open prior to October 2010.


To date, three private airlines have been licensed to operate in Vietnam, including Vietjet Air, Indochina Airlines and Mekong Aviation. Of these three, Indochina Airlines has gradually disappeared after one year of operation.


The third private airline, Mekong Aviation also plans to provide flights in 2010. The air carrier will have 10 aircrafts to fly domestic routes, including Hanoi-Phu Quoc, Hanoi-Nha Trang, Hanoi-Can Tho.


According to CAAV, by 2015, Vietnam will have 149 aircraft and provide 33 million seats.


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