Airlines trim services as downturn hits travel demand

An airplane replica seen at a ticket office of Vietnam Airlines in Ho Chi Minh City. Falling demand for travel amid the global economic downturn has forced many airlines flying to Vietnam to cut back on services and delay expansion plans.

From next month, Hong Kong Airlines will reduce the frequency of its Hanoi-Hong Kong service to five flights a week from the current seven. Sales manager Nguyen Tuan Hai said demand has fallen away sharply. Zlatko Zlatic, general manager of Lufthansa in Vietnam, said the German carrier would continue to fly three times a week this summer from Vietnam to Frankfurt, with a stopover in Bangkok. Demand is still adequate and the schedule would be restructured if passenger numbers decline, he said. Zlatic said the number of people flying from Europe and the US to Vietnam has dropped 10 percent since a year ago. The number of foreign travelers to the country fell 18.8 percent year-onyear in the first five months this year to 1.6 million, figures from the General Statistics Office show. Vo Huy Cuong, head of the Aviation Transport Department at the Civil Aviation Administration of Vietnam, said last month the number of flights registered to fly to and from Vietnam in the March-October period fell 4 percent from last year’s period. Many carriers, including Singapore Airlines, Thai Airways and Vietnam Airlines, have decided to reduce their flights, Cuong said. Vietnam Airlines has decided to cut down services on many sectors. The number of flights on the HCMC-Busan route, for instance, has been halved to two a week. The airline carried 2.3 million passengers in the first quarter, a 5 percent fall year on year, as the global recession hit leisure and business trips. “Our sales may decline and our costs are rising this year,” Pham Ngoc Minh, its chief executive officer, told Bloomberg last month. “We will try everything possible to make sure we don’t make a loss this year.” Indochina Airlines, which started operating late last year, now uses only one 282-seat airplane for its four flights between Hanoi and HCMC daily. Ha Dung, general director of Indochina Airlines, said cutting services and using just one plane are measures to deal with the economic slowdown. Even the no-frills model has not managed to weather the economic downturn very well. Budget carrier Jetstar Pacific has had to delay its plan to launch new services to Bangkok and Seam Reap. VietJet Air, a local carrier licensed in late 2007, has had to delay its first flight until the end of this year because of the downturn. Worldwide, air passenger traffic fell 3.1 percent in April, slowing from double-digit falls in the two preceding months, AFP reported Wednesday, citing the International Air Transport Association. Asia Pacific carriers saw the biggest fall in demand, with an 8.6 percent drop in passenger traffic in April. Giovanni Bisignani, director general of the airline association, said in a statement that as the decline in passenger demand still outstripped the capacity cuts made by airlines, yields have not improved. “The worst may be over. However, we have not yet seen any signs that recovery is imminent,” he said. Lufthansa’s Zlatic said the effects of the economic downturn would end soon in Vietnam and air travel demand would grow again. Hai of Hong Kong Airlines said though sales in the first few months were not so good, Vietnam, with its stable economic growth, remains a promising market. “During these hard times, we try to launch new services and manage our flight schedules well to overcome the difficulties. In the longer term, we are still scouting for new markets like HCMC and Da Nang.” Source: TN, Agencies