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Budget airlines still cannot provide budget flights
Passengers hope they can save money when flying with budget airlines. However, experts have pointed out that the current budget airlines now still cannot provide budget flights. It’s necessary to apply preferential policies for the market.
Market getting more and more expensive
Within 48 hours, since February 2, 2012, VietJet Air, a budget airline, sold air tickets at low prices for the flights on HCM City – Hanoi. Passengers only have to pay 590,000 dong to fly between HCM City and Hanoi on the days from March 1 to April 25.
Since it officially became operational in late 2011, Vietjet Air has launched many campaigns on selling tickets at low prices to create more conditions for people to travel by air.
Jetstar Pacific also regularly launches sale promotion programs on every Friday. Under some programs, air tickets on HCM City – Da Nang – Hai Phong and Vinh City are sold at 250,000 dong only, while a return ticket for Hanoi-HCM City flight costs 550,000 dong.
Currently, Jetstar Pacific is providing 40 flights a day to HCM City, Hanoi, Vinh, Hai Phong and Da Nang, serving some 2 million passengers a year.
Deputy Head of the Civil Aviation Authority of Vietnam CAAV Lai Xuan Thanh said that the domestic aviation market is a fertile land for investors with the developed economy, the rapidly growing import-export activities and the tourism industry.
This explains why not only domestic airlines, but foreign ones have also been trying to explore the domestic market, namely Air Asia, Tiger Airways, Cebu Pacific. Every week, airlines sell tickets at low prices applied to the passengers booking tickets 2-3 months in advance. The air tickets of the air carriers are usually cheaper by 30-40 percent than the tickets of traditional airlines.
The owner of a business which acts as the booking agent of one of the budget airlines, said that the number of passengers booking budget tickets has been increasing rapidly, which has prompted airlines to expand the market. In late 2011, Malaysia Air Asia opened a new air route from Phuket in Thailand to Da Nang in Vietnam.
Pritam Singh, Deputy General Director of VietJet Air, believes that the opportunities for budget airlines in Vietnam and the region are great, because low cost airlines have become the choice of more and more travelers.
“Budget airlines” means “delay airlines”?
In principle, budget airlines operate on the basis of cutting down expenses, such as the ones on the labor force, land services, air services, advertisement fees and office fees. Meanwhile, fixed expenses, which account for 75 percent of the total costs, such as aircraft chartering, maintenance fee and fuel, remain the same for traditional and budget airlines.
Budget airlines sell tickets themselves instead of selling via their sales agent networks, use one kind of aircrafts, use the same class seat for all passengers, do not offer meals. The earlier passengers book tickets, the cheaper tickets they can book.
However, Vo Huy Cuong, a senior official of CAAV, said that in fact, the budget airlines are not really budget for those, who need to travel on their schedules. Only under some sales promotion programs, can passengers buy tickets at 10,000 dong or 100,000 dong, and very few passengers can get such cheap tickets.
“No airline would sell tickets at the prices lower than the production costs, because businessmen need to make profits. Someone can buy tickets at 100,000 dong, but others will have to buy at 2-3 million dong,” Cuong noted.
Moreover, domestic budget airlines still cannot win the hearts of passengers. There are a lot of flight delays that some people call budget airlines “delay airlines”.
Many foreign airlines consider Vietnam a fertile land which can bring fat profit, while some domestic airlines have been taking loss continuously. Representative of a budget airline said that in other countries, budget airlines can enjoy tax and fee preferences, while Vietnam has not offered any special policies to develop the market.
vietnamnet
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