How and why was VietJetAir formed?
It was originally formed by a group of Vietnamese entrepreneurs. They got their license back in 2007 but due to the economic crisis, they didn’t start up operation until last year. Originally VietJetAir was going to team up with AirAsia, but that wasn’t realised. So, they did an in-depth study and decided to get into operation. I joined back in September.
Because we’re a budget airline, we are not in direct competition with Vietnam Airlines. The national carrier has their own niche market — there will always be people that for one reason or another travel Vietnam Airlines.
For us it’s about education, about persuading people to get off the roads and the long bus or train journeys and instead travel by air. To do that we have to come up with a price that is affordable and then look at volume base.
Budget carriers like Indochina Airlines have tried to succeed in Vietnam but failed. How will you avoid their mistakes?
I did a personal study of Indochina Airlines — we didn’t want to fall into their trap. One of their mistakes was that they brought in wet-lease aircraft. This means not only did they rent the aircraft but they also rented the technical team, the pilots and the crew. So the costs were really high. We went straight into a dry lease programme — we lease the aircraft long-term, which is far cheaper. Then we do the rest ourselves.
It’s like going to London and deciding to take a taxi. You hire a taxi driver with a taxi for 24 hours a day and it’s expensive. But if you rent a car for a whole month, it’s far cheaper. That’s the avenue we went down.
Also, Indochina decided they were not a budget airline but a full-service, two-class carrier. That found them competing directly with Vietnam Airlines. We’re not here to compete with Vietnam Airlines. We’re here to complement them wherever possible. The piece of cake is big enough for all of us.
Do you think there is genuinely a place for a no-frills budget operator like yours in Vietnam where its people are obsessed with all things luxury?
Look around. How many percent of the population are really into luxury? We’re not interested in that market. The open air, on-the-street restaurants are full every day. It’s those people that we’re targeting. And anyway, those people who pay for luxury will travel business class. We’re a budget airline.
To be able to offer such low prices like VND299,000, certain amenities must have been forfeited, what are they?
The one thing we won’t forfeit, of course, is safety. Not at any price. Our aircraft are fairly new — on average three-years-old — which makes them easy to maintain. This allows us to ensure our flights arrive on time.
That VND299,000 fare is a promotion price only, and only for a limited number of seats. Then it flexes up a bit. We also don’t provide any form of meals or drinks on board as part of the price of the airfare.
We try to maximise the use of each aircraft. Safety permitting, we try to fly 360 hours a month rather than 230 to 250 hours. And we have 180 seats onboard our A320s rather than 150 seats. For us it’s all about volume and to do this we have to be very cost-efficient. We cannot have too much fat in the system.
What are your goals for the airline? What are you looking to achieve in terms of the aviation industry and the way Vietnamese people travel?
Our main goal is to fly to as to as many destinations within Vietnam so we can give everyone a chance to fly with us and also allow incoming tourists to go to as many locations as an aircraft can travel to. Then to expand internationally. We will look at ASEAN first — Singapore, Kuala Lumpur — and then North Asia, Korea, Japan, Taipei and certain parts of China. By the end of 2015 we hope to have a fleet of 15 aircraft.
Our first expansion is taking place right now. We have increased the frequency of flight between Hanoi and Ho Chi Minh City and opened up routes to Danang and Nha Trang.
The company currently has a team of pilots who are 100 percent foreigner. Why hire more expensive pilots from overseas rather than Vietnamese pilots?
There is a lack of Vietnamese pilots in this country — it affects all the operators here. So, we have to hire foreigners. Also, good Vietnamese pilots cost as much as foreign pilots.
We’re now looking at a localisation programme where we hire young pilots who have a license but don’t have the A320 rating. So, we hire them, send them to Airbus for their training and then over time provide them with the background and experience to fly our planes. So, if this happens, the programme will be for up to 15 pilots. We’re also hoping to build our own simulator centre here that will help us with our own pilots and other A320 operators around the region. We’re looking at a lot of avenues that will logistically enhance the airline.
For more information on VietJetAir, go to www.vietjetair.com