Vietnam Airlines expects reduced market share as competition hots up

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Vietnam Airlines is reconciled to a lower market share

Vietnam Airlines expects its market share to drop this year but profits will rise, news website thoibaokinhtesaigon reported.

In its business proposals for this year, which it submitted to the Ministry of Transport, it expects its domestic market share to fall from 61.4 percent now to around 55 percent.

Its international market share is expected to be down to 39.3 percent from 40.5 percent last year.

Last year its domestic market share fell by 7.3 percentage points though the aviation market grew by 21.5 percent, with most of it coming from the domestic sector, which is expected to continue growing this year.

According to the Ministry of Transport, Pham Viet Thanh, the carrier's chairman, expects this year to be a difficult one for his company, especially with its privatization looming.

The Ministry of Transport has promised to wrap up the process this year after failing last year.

Some Middle Eastern carriers like Emirates, Etihad Airways, and Qatar Airways have added more flights from Vietnam and onward to other destinations, causing pressure on all airlines operating in the country, including Vietnam Airlines.

Even at home, Vietnam Airlines has increasing competition.

Budget carrier Vietjet Air, for instance, increased its market share to 26.1 percent from 20 percent last year.

Vietjet expects to continue increasing its market share this year by doubling the number of aircraft to around 20 and number of flights to around 37,000, carrying six million passengers.

Vietnam Airlines plans to buy only one more airplane this year to increase its fleet size to 83.

It targets a 139.6 percent jump in profits to VND335.2 billion (US$15.9 million)., though this will also include profit from sale of aircraft.  

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