Socialist Republic of Vietnam

Foreign airlines in Vietnam have slashed their prices on international routes in an aggressive attempt to boost their share of the country’s aviation market.

Although United Airlines will officially launch its first flight from Ho Chi Minh City to San Francisco via Hong Kong in 10 days, it completed a discount campaign offering promotional fares of $US 720 on the same route two months ago.

On Sept. 15, the U.S. air giant started another promotion program, charging passengers only $US 400 per round-trip ticket for the Ho Chi Minh City-Hong Kong route and $ 900 per round-trip ticket between Ho Chi Minh City and the U.S.

“The discount fares are aimed to introduce our presence to customers,” said Joe Mannix, executive chief of United Airlines’ Vietnam branch.

Earlier, the German airline Lufthansa cut its air fares between Ho Chi Minh City to Europe from $ 1,149 to $ 849 and offered free tickets to Bangkok.

Prices have also subsequently dipped on routes from Ho Chi Minh City to Singapore and Indonesia with the emergence of Indonesian carrier Garuda. A tour operator in the city said customers only pay $US 199 for a three-day tour to Singapore.

“A price war has begun,” said Pham Ngoc Minh, deputy chief executive of Vietnamese national flag carrier Vietnam Airlines.

After the SARS outbreak last year, the cost of air services on international routes slipped 10 to 15 percent, estimated Nguyen Hai, chief executive of Transviet, a ticket sales agent for many foreign airlines.

The price reductions of United Airline and Lufthansa were merely promotional activity, but it helped lower average airfares, Mr. Hai said.

“We all know that carriers just entering the market often use low prices as an efficient method to introduce themselves,” Mr. Minh said.

“We need to react or we will lose customers,” he added.

Currently, Vietnam Airlines’ fares on the Ho Chi Minh City-Hong Kong route are fluctuating between $US 573 and $ 600.

Meanwhile, competition on routes between Vietnam and the U.S. has become fiercer with the emergence of American Airlines.

“Although our potential passengers are businessmen, our fares are still very competitive,” said Ngo Minh Duc, chief representative of American Airlines in Vietnam.

“We are conducting talks with Vietnam Airlines about flying to Paris and Frankfurt before coming to the U.S.,” he added.

Reported by Trung Binh – Translated by Hieu Trung.
Story from Thanh Nien News
Published: 03 December, 2004, 00:04:20 (GMT+7)
Copyright Thanh Nien News