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Vietnam Airlines profits from Air France’s flight suspension

Air France’s decision to suspend direct flights from Paris to Hanoi and Ho Chi Minh City will benefit Vietnam Airlines as it will be the sole carrier for the direct routes, said an airline official Feb. 18.

Air France’s move will allow national flag carrier Vietnam Airlines to enjoy a de facto monopoly on those routes, said Pham Ngoc Minh, Vietnam Airlines deputy chief executive.

Vietnam Airlines first launched non-stop flights to France in July 2003. Then in February 2004, Air France and Vietnam Airlines struck a code-share agreement to launch direct flights between the two countries and Air France started offering direct flights in April 2004.

Since then, the two carriers have operated 12 non-stop flights a week between France and Vietnam.

“Although the code-share agreement in theory means cooperation between the two 1companies, competition in fact still exists,” Mr. Minh said.

Vietnam Airlines has managed to make good profits on these routes because it uses Boeing 777-200s airliners while Air France only uses Airbus A340-300s, he said. “Therefore, Air France’s suspension is seen as a victory for Vietnam Airlines,” said Mr. Minh.

As well, “Vietnam Airlines will be the sole carrier operating direct link between Vietnam and Europe,” he added.

The airline leader said Air France decided to suspend the services following unprofitable operations on the routes.

But, Air France reported that its decision was aimed at concentrating on the more lucrative Chinese and Japanese routes.

An Air France official said the carrier saw huge demand for its direct flights to Japan and China and it did not have enough planes to operate all routes properly.

However, the French airline confirmed that Vietnam’s aviation market had potential and that the suspension was just temporary.

Air France said it was planning to re-establish the code-share deal by the end of October 2005. Vietnam Airlines officials also confirmed the information.

Source: VNExpress – Compiled by Hieu Trung.

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