AirAsia ready to take off in Vietnam

BANGKOK, Thailand (eTN) – Speculations have been abounding over the destiny of AirAsia’s joint venture with Vietjet in Vietnam. The agreement signed in early March 2010 announced that AirAsia had acquire a 30% equity stake in VietJet Aviation Joint Stock Company (VietJet Air), the ticket entry to establish a Vietnam-based joint venture low-cost airline. However, for over a year and a half, the future VietJet AirAsia has been blocked over the company name by the Vietnamese government.

The launching has been delayed many times from August to year-end in 2010 and then to early 2011. But now it seems official, according to Tassapon Bijleveld, Thai AirAsia (TAA) CEO, and the one who has been coordinating the establishment of the Vietnamese subsidiary. “We just finished recruiting pilots and flight attendants. We should definitely take off by December,” he explained.

The old name of the company will be preserved for now, and the AirAsia Vietnamese subsidiary will first have a fleet of two Airbus A320 based at Ho Chi Minh City Tan Son Nhat Airport and fly domestic routes in a first phase. “We will then expand to regional destinations around Indochina,” said the TAA CEO.

In Thailand, Thai AirAsia will continue focusing its network expansion into South Asia. The airline confirms that it will start flying from October to Colombo, targeting tourists and pilgrim travelers. It is still waiting for the approval to start flights from Bangkok to Chennai (Madras) and Bangalore. “We are also looking to offer a nonstop flight between Phuket and India, but it gets difficult to obtain slots, as the airport is reaching saturation. This is quite a frustration as our Phuket hub is doing very well,” Mr. Bijleveld added.

Another frustrating issue is Laos, where Thai AirAsia has been unable to secure flights to Vientiane, as Laotian authorities fear that competition would harm its own national carrier Lao Airlines. “We would love to fly there, as it is the last Indochinese capital that we do not fly out of Bangkok. But I think that we will have to wait until the complete ASEAN open sky policy is implemented in two or three years,” he told. The carrier is also studying the opening of new flights from Chiang Mai to Udon Thani and Ubon Ratchathani. “We are encouraged by the success of our flight Chiang Mai-Hat Yai with occupancy reaching 90%. Our average occupancy on our network is up this year at 81%,” highlighted the Thai AirAsia CEO.

Thai AirAsia expects a similar profit to 2010 this year and will carry over 7 million passengers. With 2 additional Airbus A32O due to be delivered before year end, Thai AirAsia will have a fleet of 21 aircraft.