The Vietnamese government has encouraged the use of budget airlines by both the State and private sectors to save on travel costs in order to shore up the national economy.
It is estimated that Vietnamese air travelers can save VND9 trillion (over US$428 million) a year by using budget airlines. Each traveler saves an average of VND500,000 ($25) per flight.
The Communist Party of Vietnam recently issued Directive 38-CT/TW urging domestic businesses to save on transportation costs for air travel by using budget airline services.
According to Deputy Prime Minister cum Foreign Minister Pham Binh Minh, 3,780 government delegations travelled abroad in 2012 and the number was 3,200 delegations in 2013.
All overseas trips for government delegations are funded by the State budget.
Considering the geography of Vietnam with economic hubs are far from each other, significant savings can also be made on domestic flights by flying with low-cost carriers. It is estimated that by flying with low-cost air carriers, each passenger can save from VND500,000 to VND1 million ($25-50) per flight.
With the launch of budget airlines, such as VietJet, more and more companies in Vietnam have benefited from booking tickets well in advance to secure low-cost air fares.
Experts also point out that more reasonably priced airfares can encourage tourism development and investment, both locally and internationally. We can call these the “invisible advantages” of saving on air travel - the more we reduce on transport costs, the more small businesses will benefit from our extra spending power, and the more businesses across all industries will benefit.
That’s why budget airlines are now strongly favored around the world, particularly in the time of global downturn, which has led many governments placing an emphasis on austerity and businesses realizing the importance of trimming budgets.
In Southeast Asia, the market is dominated by low-cost carriers such as Lion Air (Indonesia), Air Asia (Malaysia), Nok Air (Thailand) and Tiger Air (Singapore). Regionally low cost carriers account for 65-70% of the domestic market share. In Vietnam, the market share of budget airlines is more modest at just over 30%.
It is an absurd that Vietnam’s average per capita income is lower than many neighboring countries but domestic travelers are spending more on air travel by flying with traditional airlines.
When former Singaporean Prime Minister Lee Kuan Yew visited Vietnam, he flew with Tiger Air, a low-cost carrier. Isn’t this a great example of how a government can boost the profile of low cost carriers while also acting as an example to others?
Clearly, budget airlines are a global trend and Vietnam is slowly catching on. In response to the Politburo’s aforementioned call to save on air travel, Minister of Transportation Dinh La Thang asked his staff to give priority to budget airlines when travelling by air.
Thang also backed the domestic aviation industry which is not just developing strongly but innovating constantly. By choosing to fly with low-cost carriers, we can earn many more benefits both individually and collectively.
Source: VietNamNet
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