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Business

Vietnam Airlines decides to try harder

HANOI -- Vietnam Airlines is trying to more effectively compete with and possibly regain lost market share from VietJet Air and other budget rivals.

The cabin of this A350 XWB features large entertainment screens for all passengers.

     One piece of its strategy has been to add big, state-of-the-art aircraft to its fleet. To this effect, the number of the state-owned carrier's new jetliners may soon reach 49.

     On July 2, the airline celebrated the delivery of its first A350 XWB, from Airbus. The jet landed at Noi Bai International Airport, in Hanoi. The ceremony was attended by Prime Minister Nguyen Tan Dung, who said he hopes the plane helps Vietnam Airlines become one of Southeast Asia's leading carriers.

     Only four days later, the airline welcomed another delivery -- its first 787, from U.S.-based Boeing. The Dreamliner landed at Ronald Reagan Washington National Airport, in the suburbs of Washington, D.C.

     The event was witnessed by Nguyen Phu Trong, the first general secretary of the Vietnamese Communist Party to visit the U.S. He christened the aircraft by splashing champagne on the spick-and-span 787, painted in Vietnam Airlines blue.

     The carrier's turnaround plan is ambitious. In addition to the 33 new jetliners it has ordered, the last of which will be delivered in 2020, it began talks on acquiring another 16 planes, including more 787s. If all goes well, the airline's seating capacity will more than double.

     Vietnam's flagship carrier hopes to launch new routes between Vietnam and the U.S. as well as expand the number of passengers it carries to and from Europe and South Korea.

     As for service aspects, the airline in September begins offering in-flight Wi-Fi on some routes. It also plans to upgrade its Web check-in service so flyers can take care of the process via their smartphones.

     Also on the agenda is improving in-flight meals in collaboration with luxury hotels. Pham Viet Thanh, chairman of Vietnam Airlines, said his company intends to offer top-grade service to passengers by fusing traditional culture with state-of-the-art technologies.

     A 39-year-old who said he frequently flies with Vietnam Airlines noted that the time required to check in seems to have been reduced. And, he said, "attendants have definitely become politer than before."

     Among Vietnam's budget airlines, VietJet stands out. It began operating in 2011 and has been attracting attention by trumpeting steep, though limited-quantity, discounts and other promotions.

     By 2014, VietJet had a 32% share of Vietnam's passenger aviation market. That took a big bite out of Vietnam Airlines' market share, which stood at 54% in 2014, then may temporarily dip below 50% this year.

     The Southeast Asian country's aviation market is swelling, partly thanks to expectations for the Association of Southeast Asian Nations (ASEAN) Economic Community, due to be created by the end of this year. At any rate, the number of passengers in 2014 increased 15% on the year to 50 million. The International Air Transport Association forecasts Vietnam's aviation market to be the world's seventh fastest growing for international passengers during the five years through 2017.

     Still, though, all the shiny new planes, five-star meals, its place in a fast-growing economic region and even government support do not guarantee a rosy future for Vietnam Airlines.

     The fact is, the carrier has plenty of problems. As of December, 12.4% of its flights were late. While that is an improvement -- Vietnam Airlines used to run late more than 20% of the time -- it is a far cry from Japanese carriers, which are almost always on time.

     Another problem is that most of Vietnam Airlines' fleet is made up of aged, midsize aircraft.

     The airline's heavy reliance on government support is also a concern.

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