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Vietjet Air hopes some JAL quality rubs off on it

Budget airline known for bikinis now wants to mind the details

Vietjet has all but overtaken Vietnamese flagship carrier Vietnam Airlines in their domestic market. (Photo by Nozomu Ogawa)

HANOI -- The CEO of Vietjet Air, the budget carrier that is eating up Vietnam Airline's share of the domestic aviation market, is rather meticulous in her personal life. She never lets the demands of the job keep her from her daily yoga and other exercise routines. And she has a Japanese stylist do her hair in the morning because she likes the attention to detail.

Now her airline has a Japanese partner that will coach it on how to pay attention to the minutiae that, hopefully, can build brand loyalty.

Vietjet and Japan Airlines have tied up to, among other things, boost the cash cow route with over 1 million overall flyers between the two countries.

Late last month, Vietjet held a press conference at its headquarters in Ho Chi Minh City. Founder and CEO Nguyen Thi Phuong Thao, 47, appeared with her husband, Nguyen Thanh Hung, chairman of Vietjet's parent company, Sovico Holdings, a conglomerate. That the couple posed in front of cameras together -- the husband rarely makes public appearances -- shows how serious Vietjet takes the JAL pact.

Thao told journalists that the tie-up is significantly more important than any other that the airline has signed to date. She stressed that Vietjet will cooperate in a range of areas with JAL, including sales, employee training and improving services. Thao and Hung were so eager that right then -- in front of reporters -- they asked JAL Executive Vice President Tadashi Fujita what they could do to bring JAL quality to Vietjet.

Since its maiden flight in December 2011, Vietjet has used low prices and occasional in-flight bikini performances to draw ever more passengers and steadily increase its share of Vietnam's aviation market. Last year, it controlled 41.5% of the market, edging closer to Vietnam Airlines' 42.5%. This year, the budget airline looks almost certain to beat out its state-backed rival in this yardstick.

Vietjet's biggest problem used to be punctuality. But its ratio of delayed flights has improved from roughly 50% (Jan-May 2014, according to Civil Aviation Authority of Vietnam) to 12.3% in the first three months of this year. Also, there are more choices for in-flight meals and variety in in-flight shopping than on Vietnam Airlines.

Now that the budget airline has overcome its "low-cost, low quality" image, its next challenge is to strengthen its international routes and services.

Thao is said to have championed the tie-up with JAL. If this is the case, it would fit her personal history.

Vietjet Air CEO Nguyen Thi Phuong Thao, left, poses with JAL Executive Vice President Tadashi Fujita in Ho Chi Minh City on July 25.

In 1988, she was based in the Soviet Union. Seeing shortages of just about everything, she made a fortune by importing fax machines, natural rubber and myriad other things.

She even met her husband-to-be in the country, where they set up Sovico.

She eventually made her way back to her still-communist home country where she would go about tilting at the status quo. In 2007, she obtained government approval to enter the airline business. But she did not go right into it. Instead, she spent six years studying the many permutations of the low-cost carrier business model.

Thao often talks of the need for Vietnamese women to play a bigger role in society. She actively names women to administrative posts and has hired more than 10 female pilots. She has taken her baby on business trips.

Last year, Thao told The Nikkei that the company must raise its share of international flights in terms of sales from 20% to 40% within a few years. Vietjet has already ordered 120 aircraft from Airbus, including A321s, and 100 aircraft from Boeing, including B737s. The jetliners will be added to a current fleet of about 50 aircraft; many will fly between Vietnam and Japan.

Some 740,000 people visited Vietnam from Japan in 2016, up 10.4% from the year before. The traffic in the other direction increased 27.9% over the same period to about 240,000. In addition, there were 3.8 times more Vietnamese citizens -- 200,000 in total -- living in Japan at the end of last year compared to 2012. And among foreigners living in Japan as so-called "technical intern trainees," Vietnamese make up the largest group, with over 20,000, outnumbering Chinese trainees.

Japan plans to accept still more Vietnamese to make up for the country's shortage of nursing care workers.

Not only are trend lines working in Vietjet's favor, so is serendipity. Recently, Vietnam Airlines and JAL, partners since 1994, broke up. Forgive Thao, though, if the divorce looked like an opportunity. While the Southeast Asian country's flagship carrier accepted an investment from ANA Holdings, another of Japan's two major airlines, it left JAL looking to tie up again.

Besides the mentoring, JAL might be able to help Vietjet fill seats on new routes between major Vietnamese cities -- such as Hanoi, Ho Chi Minh City and Danang -- and Japan's Narita Airport, just outside Tokyo, or Kansai Airport, near Osaka.

On code-share flights, JAL customers are expected to be assigned Vietjet's SkyBoss seats, which give ticket holders certain privileges. Vietjet customers will take the remainder of the seats.

The two airlines also hope to make it easier for Vietjet flyers to catch connecting flights in Japan -- one of those details the partners will now fuss over together.

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