Branding makes for a bumpy landing in Vietnam
The challenges of running a low cost airline alongside Vietnam’s domestic carriers have been exposed yet again by AirAsia’s threat to withdraw capital from the private carrier, VietJet Air.
Government rules that limit images and logos of overseas partners are at the heart of a dispute that could kill off the venture.
In February 2010, AirAsia announced it had acquired a 30 percent stake in VietJet Air as the sole foreign shareholder. The two parties were expected to operate commercial flights under the brand, VietJet AirAsia.
But that branding is being challenged by Vietnamese government authorities.
In late 2007, VietJet Air became the first private airline in Vietnam to be licensed. It has since repeatedly postponed launch plans.
The airline must start flying by May or lose its permit.
Qantas offshoot Jetstar Pacific has faced similar branding problems, which are seen as barriers facing companies that want to invest in Vietnam’s aviation industry.
The Civil Aviation Administration of Vietnam (CAAV) disallowed the use of “Jetâ€, “Jetstarâ€, and the star symbol of Jetstar Pacific.
As well, two Australian executives of Jetstar Pacific were detained in Vietnam after the carrier reported losses of more than $US31 million ($33.8m) on fuel contracts.
Ian Jarrett
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