Air Mekong stopped flying: Why?

According to aviation experts, much earlier prior to the Ministry of Transport’s official annul of Air Mekong’s aviation transport license the mission of this private airline’s flying fleet including four modern jets Bombardier CRJ900 had in fact concluded in early December 2012 following the launching of Phu Quoc international airport in the southern island province of Kien Giang.

Since the new airport could receive big modern aircraft like Boeing 747-400 and equivalents, Air Mekong lost its last advantage to other rivals on Vietnam’s longest straight air route from Hanoi to Phu Quoc.

Air Mekong leaders had once pegged their hopes on the Hanoi-Phu Quoc straight air route and several other sea and island related routes, but like the case with Phu Quoc international airport, other airports throughout Vietnam have been constantly renovated to receive larger-capacity aircraft.

Losing the advantage of flying on short runway, it had proven extremely hard for the Bombardier CRJ900 jet fleet of Air Mekong which could only transport 90 passengers to compete head-on with the fleet of big modern aircraft like A320, Airbus321 and Boeing 777 of national flag carrier Vietnam Airlines and of budget carriers Vietjet and Jetstar Pacific.

Earlier, Air Mekong was regarded as having a smart business strategy of choosing specific market segment using specific aircraft to avoid competing directly with Vietnam Airlines which currently retains 80 per cent market share and owns 80 aircraft.

“We could not give low marks to Air Mekong’s business strategy. In its first year of operation, Air Mekong’s tactic of choosing to operate on some specific routes using specific type of aircraft had proven quite effective in the domestic aviation market,” said Do Xuan Quang, chairman of Vietnam Logistics Business Association.

Quang noted that Air Mekong’s preparation was fairly scientific, ranging from hiring of brand-new aircraft as well as experienced cabin crews from world’s well-known airline operator Sky West to development of expansive agent network throughout the country.

Apart from its fleet gradually losing its advantage, economic slump left a hole on Air Mekong’s passenger number.

Besides, amid a fierce market competition the services providers had to reduce prices to attract customers, and Air Mekong was not an exemption.

Just after two years in business, the private carrier was reported to incur losses amounting to about VND900 billion ($42 million), exceeding the endurance of parent company BIM Group though the parent company had planned to accept Air Mekong’s loss making in the first three years of operation.

In addition, like Indochina Airlines- Vietnam’s first private airline which stopped flying since 2010, Air Mekong operation had heavily relied on outsourcing, including costly crew member and maintenance services.

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