Vietnam Airlines gains stake in Jetstar

Vietnam Airlines has acquired a 70% stake in Jetstar Pacific Airlines, from the State Capital Investment Corporation.

Local media, Sai Gon Giai Phong reported over the weekend that Civil Aviation Administration of Vietnam had confirmed the 70% sale by State Capital Investment Corporation that transfers a major stake in in Jetstar Pacific Airlines to the government controlled Vietnam Airlines.

Qantas, the mother company of Jetstar still holds 27%, while Saigon Tourist Holdings has a 3% stake.

Vietnam Airlines almost monopolises aviation in the country with a 80% market share, but the latest acquisition will see it raise its share to over 90%, a situation that critics say will further limit consumer choice and raise fare structures in the long-run.

Air Mekong and VietJet Air (Launch 25 December) are newly-established carriers operating on a very small scale.

Jetstar Pacific suffered losses mainly caused by skyrocketing fuel prices and fluctuation in the US dollar exchange rate, according to the report.

Jetstar Pacific Company’s revenue was in Vietnamese dong, while more than 80% of its expenditure were in US dollars.

There were numerous conflicts with Vietnam Airlines that provided fuel, ground handling and catering services. It also used its powerful government links to set in motion draconian rules on how foreign investors could brand their joint venture airlines in the country.

Vietnam Airlines counters the criticism by alleging Jetstar Pacific was not paying is bills on time.

The carrier now has seven aircraft (five B737 and two A320) and operates flights to and from six domestic destinations – Hanoi, Ho Chi Minh City, Danang, Hai Phong, Hue and Vinh.

Source - ttrweekly.com