Pacific Airlines Accuses Vietnam Airlines of Unhealthy Competition

Pacific Airlines (PA), Vietnam’s second largest airline, has sent a complaint to the Ministry of Finance and the Vietnam Civil Aviation Administration accusing its rival Vietnam Airlines (VNA) of violating the Law on Competition by undercutting fares.

 

PA’s letter said although the national flag carrier Vietnam Airline holds up to 85 per cent of the local aviation market it has during recent time continuously launched fare discount programs on routes which PA is also exploiting.

 

By doing so, VNA has violated the Law on Competition, PA said.

 

Besides, since VNA also has exclusive rights to provide ground services, Pacific said it has to suffer “total domination” by its bigger rival, adding that all this has worsened its financial situation.

 

Having cut its fares on late-evening Hanoi-Ho Chi Minh City flights, PA said it has lost VND60 billion (US$3.77 million) last year, which affected its restructuring plan.

 

Pacific Airlines, Vietnam's sole joint-stock air carrier, which is much smaller than Vietnam Airlines, the country's main state-owned carrier, evaded bankruptcy in late 2004 and is now valued at US$167 million. VNA used to own 86 per cent of PA’s stake but transferred all to the Ministry of Finance after PA’s huge loss of VND360 billion (US$22.64 million) last year.

 

Currently, Pacific Airlines conducts 35 domestic flights and 10 international flights a week.