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The Vietnam News

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Airline price war takes flight in VN

HANOI - A price war between international airlines has made Viet Nam one of the more robust aviation markets in Southeast Asia, industry experts said on Sunday. Sales manager at Ha Noi-based ticketing agent Vitex, Nguyen Viet Dung, said the industry expected price wars between airlines to continue for some time. "Future competition between airlines should be very fierce, but it will primarily benefit travellers," Dung said.

Flights in and out of the country have dropped by nearly 30 per cent since summer 2003, just after the SARS breakout was controlled, with airlines slashing prices to lure travellers back. A return air ticket to Europe can be bought for US$760 compared to last year’s $1,000 average.

The Vietnamese industry will expand significantly this year with two US giants — American Airlines and United Airlines — to enter the fray with existing carriers like Indonesia’s Garuda and Lion Air, China’s Shanghai Airlines, Malaysia Airlines and Singapore Airlines. When American Airlines began to operate flights to Viet Nam in April it became the first US entrant into Viet Nam. The industry believes United Airlines, whose Vietnamese debut is scheduled for this December, should add a competitive edge that could further drive prices down on the Viet Nam-US route. The entry of the US airlines results from last year’s bilateral aviation pact between Viet Nam and the United States.

All’s fare in the air

American Airlines sparked a price war earlier this year on the Viet Nam-US route offering a promotional fare of $900, down from the original return of $1,500.Other players followed suit: this month, Hong Kong’s Cathay Pacific lowered its US fare to $1,000, and offered any internal US flight for one additional dollar. HCM City-based ticketing agent, Dinh Vang, said Vietnam Airlines, Eva Air and China Airlines responded by reducing their US fares to an average $950.Thai Airways went to greater extremes dropping its price to $840, although passengers had to transit in Bangkok and Tokyo’s Narita Airport.

Dung from Vitex said competition had been even stiffer on routes to Europe, Australia and Japan.Malaysia Airlines led the way offering a $769 return fare for Ha Noi-Paris flights.During the low season, Vietnam Airlines offered $799 for flights to Europe, but the present peak tourist time had seen prices lift to $980, compared to a $1,000 fare from Air France.

Ticket agents were also engaging in their own fierce price war said agents Dinh Vang, and sources from Vitex and Fiditours. Most of these agents offered prices $5-10 below quotes posted by airlines.Dinh Vang said if a return air ticket to Japan costs $783, passengers will get a $10 discount if buying two tickets at once.He said they offer home ticket delivery, free airport transfers, and no charge consultation.

Service takes flight

Aviation industry experts said increased competition raised service standards with airlines making all-out efforts to lure customers.Since September 11 and SARS, airlines have been buying up new jumbo fleets and improving customer service.Air France and China Airlines were reportedly recruiting Vietnamese-speaking flight attendants to serve Vietnamese passengers.Vietnam Airlines is also employing Japanese and Chinese speaking staff on its Japan and China routes, while Cathay said it has Vietnamese staff dealing with transit passengers at Hong Kong’s Chek Lap Kok Airport.

Lower prices, quality service and fewer stopovers was the formula for success said experts, who praised China Airlines for reducing transit time on its US flights to roughly 90 minutes.Experts noted the domestic flight scene was less eventful, as it was dominated by Vietnam Airlines, and suggested the national airline focus on competitive pricing and customer service.

Vietnam News Services - November 9, 2004