18:16' 04/05/2008 (GMT+7)
Several securities firms have continued to expand their brokerage offices into provincial rural and urban areas to attract new investor activity despite the stock market downturn.
These securities groups are going on the offensive to grab their share of the growing nationwide demand for access to traded stocks in anticipation of a coming market recovery.
The boom in the number of new brokerage offices has been facilitated at the same time by new, easier administrative procedures for securities companies to establish localised branches.
Securities firms can now open local offices without first having to obtain permission from the State Securities Commission (SSC), and are simply required to report a new branch once it has already opened.
Brokerage houses have cut costs by co-ordinating with local enterprises. While the securities company focuses on personnel and equipment, the local enterprise provides the real estate in which the partnership is housed.
Expansion into the provinces has also been motivated by the mushrooming number of agencies in the trading hubs of Ha Noi, HCM City and Hai Phong City. As these markets approach the point of saturation, firms have begun to look outward in the search for greater transactional capacity.
For example, An Binh Securities Company (ABS) co-operated with Tat Thanh Co Ltd to set up an agency in Thai Nguyen City on April 24. This was the 16th local branch of ABS to open nationwide.
"The opening of this new ABS branch will satisfy the demand of this industrial city’s stock market investors," said an ABS representative.
On the same day, Capital Securities Co (CSC) opened an agency in northern Ha Nam Province. This is the first provincial branch of CSC, and also the first securities firm to open a local office in Ha Nam.
APEC Securities Co (APECS) opened an office in the northern Thai Nguyen Province on April 23 in co-ordination with Tan Cuong Hoang Binh Joint stock Co.
APECS recently opened branches in the four provinces of Long An, Dak Lak, Nam Dinh and Nha Trang City, as well as an office in Ha Noi.
On April 12, VNDirect Securities Co launched a local trading office at Vinh Yen Township in northern Vinh Phuc Province.
Nguyen Manh Hao, director general of APECS, said that since the firm’s inception it had pursued the development of a nationwide network of offices.
Hao expressed reservations about the promise of remote market connectivity, however, saying, "Although the application of modern technologies has made it possible to trade securities via telephone or online, someone still has to be there on the trading floors to make a deposit or withdrawal on an account, or register an account in the first place, so the on-site agency will always be necessary."
To operate such an agency, said Hao, it costs APECS, and other firms like it, tens of millions dong a month. This sum is not small, especially given the current difficult situation with the market as well as the fierce competition between securities firms.
Taking on the added cost of developing a nationwide brokerage network, therefore, is a long-term strategy on the part of APECS with a view towards staking out a dominant position in the market in advance of its rebound in the future, Hao added.
Viet Nam’s stock market is still in its infancy and it has great potential to develop under long-term vision. While the number of private individuals investing in securities throughout the country so far remains modest, analysts predict that the figure will continue rising steadily.
Hoang Van Hiep, a farmer in the central highland province of Lam Dong said: "While real estate prices are high and unstable, investment in securities becomes more attractive."
Another farmer in Lam Dong Province said: "Securities investment is a new and unfamiliar channel of financial activity for me, but definitely one that I intend to look into further and in which I hope to one day participate."
Sunday, 4 May 2008
FDI disbursement hits new monthly record
17:18' 04/05/2008 (GMT+7)
A Tatung Viet Nam Company worker installs refrigerator parts. FDI disbursement reached more than $1.4 billion in April.
VietNamNet Bridge - Foreign investment disbursed in April reached more than US$1.4 billion, the highest amount ever in a single month, according to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).
Disbursement of foreign direct investment (FDI) refers to actual capital investment made following an earlier commitment by foreign investors in the form of registering for an investment licence.
Disbursement, therefore, is a more accurate measure of the real impact of FDI on the economy than gross FDI totals based on registration of projects.
Disbursement follows all licensing procedures and approvals and reflects actual capital expenditures and commencement of business operations.
For instance, $8 billion was disbursed out of a total registered FDI of $21.3 billion last year, according to the FIA. There were now 8,600 foreign-invested projects pending or in progress nationwide, with $85 billion in registered capital, of which only $30 billion has been disbursed.
South Korea’s Halla Energy & Environment became the latest major foreign investor to disburse capital on Tuesday, breaking ground on a factory for producing heavy industrial equipment in the My Xuan B1 Industrial Park in the southern province of Ba Ria-Vung Tau.
"Having received an investment licence in January, we have now been able to begin construction of the facility from which products should hit the market by the end of this year. It’s unexpectedly fast," said Vina Halla general director Ho Yong Shon.
Le Minh Chau, director of the Ba Ria-Vung Tau industrial zones management board, said the province’s FDI disbursement rates, the ratio of disbursed capital over registered capital, had reached 45 per cent.
"Most foreign-invested pro-jects in the province are implemented on schedule," Chau said.
Dong Nai Department of Planning and Investment director Bo Ngoc Thu boasted that the province’s FDI disbursement rates had reached about 57 per cent.
In the southern province of Dong Nai, two real estate projects covering sites of 366ha and 305ha, had investment licences issued last Friday and saw construction begin only five days later, said Thu.
"We are fully aware of the importance of preparing sites for investors. Most foreign-invested projects in industrial zones can disburse capital as soon as investors receive investment licences," said Foreign Investment Agency director Phan Huu Thang.
Thang said authorities were making great efforts to reduce the lapse between registration and disbursement of capital. Disbursement currently lagged considerably behind registration, he said.
"Our goal is to have disbursement reach up to 50 per cent of last year’s registered capital, with a target to reach disbursement of about $10 billion this year," he said. "But a higher figure could be reached if all localities deal effectively with site clearance."
Dong Nai, besides building resettlement areas, has piloted farmers joining their capital with companies in the form of contributing their land to projects such as the $750 million Dong Nai Waterfront City and $305 million Aqua City.
"Farmers will enjoy direct benefits from their capital contributions, while avoiding disruption to their livelihoods," said the provincial Department of Planning and Investment.
Thang also said projects that fall behind schedule without legitimate reason would have their licences revoked. This month and next, in accordance with Ministry of Planning and Investment directions, authorities would conduct a review of projects in some major cities and provinces, recommending some for revocation of investment licences.
A Tatung Viet Nam Company worker installs refrigerator parts. FDI disbursement reached more than $1.4 billion in April.
VietNamNet Bridge - Foreign investment disbursed in April reached more than US$1.4 billion, the highest amount ever in a single month, according to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).
Disbursement of foreign direct investment (FDI) refers to actual capital investment made following an earlier commitment by foreign investors in the form of registering for an investment licence.
Disbursement, therefore, is a more accurate measure of the real impact of FDI on the economy than gross FDI totals based on registration of projects.
Disbursement follows all licensing procedures and approvals and reflects actual capital expenditures and commencement of business operations.
For instance, $8 billion was disbursed out of a total registered FDI of $21.3 billion last year, according to the FIA. There were now 8,600 foreign-invested projects pending or in progress nationwide, with $85 billion in registered capital, of which only $30 billion has been disbursed.
South Korea’s Halla Energy & Environment became the latest major foreign investor to disburse capital on Tuesday, breaking ground on a factory for producing heavy industrial equipment in the My Xuan B1 Industrial Park in the southern province of Ba Ria-Vung Tau.
"Having received an investment licence in January, we have now been able to begin construction of the facility from which products should hit the market by the end of this year. It’s unexpectedly fast," said Vina Halla general director Ho Yong Shon.
Le Minh Chau, director of the Ba Ria-Vung Tau industrial zones management board, said the province’s FDI disbursement rates, the ratio of disbursed capital over registered capital, had reached 45 per cent.
"Most foreign-invested pro-jects in the province are implemented on schedule," Chau said.
Dong Nai Department of Planning and Investment director Bo Ngoc Thu boasted that the province’s FDI disbursement rates had reached about 57 per cent.
In the southern province of Dong Nai, two real estate projects covering sites of 366ha and 305ha, had investment licences issued last Friday and saw construction begin only five days later, said Thu.
"We are fully aware of the importance of preparing sites for investors. Most foreign-invested projects in industrial zones can disburse capital as soon as investors receive investment licences," said Foreign Investment Agency director Phan Huu Thang.
Thang said authorities were making great efforts to reduce the lapse between registration and disbursement of capital. Disbursement currently lagged considerably behind registration, he said.
"Our goal is to have disbursement reach up to 50 per cent of last year’s registered capital, with a target to reach disbursement of about $10 billion this year," he said. "But a higher figure could be reached if all localities deal effectively with site clearance."
Dong Nai, besides building resettlement areas, has piloted farmers joining their capital with companies in the form of contributing their land to projects such as the $750 million Dong Nai Waterfront City and $305 million Aqua City.
"Farmers will enjoy direct benefits from their capital contributions, while avoiding disruption to their livelihoods," said the provincial Department of Planning and Investment.
Thang also said projects that fall behind schedule without legitimate reason would have their licences revoked. This month and next, in accordance with Ministry of Planning and Investment directions, authorities would conduct a review of projects in some major cities and provinces, recommending some for revocation of investment licences.
Trade gap narrowed to curb inflation
17:10' 04/05/2008 (GMT+7)
The Ministry of Finance reported that, in first four months, the excess of import over export reached US $11.1 billion, equivalent to 60.8% of export turnover.
In his message on dealing with difficulties and obtaining sustainable socio-economic development, the PM emphasized that “the trade balance is a very important macro index. Trade deficit which increased in 2007 and kept going up in the first quarter of this year is threatening the macro-economic balance. This problem must be settled through boosting export and controlling import.”
To realise the PM’s directions, some technical barriers have been lifted to reduce the trade deficit. Export tax rate of minerals has been readjusted to control the export of raw materials: coal raised from 10% up to 15%, crude oil to 8%, pure and raw iron-ore to 20%. Import tax and special consumption tax have been raised for some luxury products, including CBU automobiles, spare parts, and electronic products.
Machinery and equipment continue to be imported to serve domestic production
In order to guarantee capital resources for producers and traders of exports, the State Bank confirmed, the credit structure has been readjusted towards increasing loans for effective projects, export and agricultural activities, rural areas, poor households and social policy-beneficiaries.
It was reported that the export turnover in the first four months was US $18.260 billion, up 27.6% as compared to the same period last year. Increases were seen in the turnover of most of exports in comparison with the same period of 2007, such as rice up 72.7%, plastic products 34.1%, tea 34%, textiles 24.5%, rubber 23.7%, wood furniture 22.5 %, and aqua-products 13.6%.
The April import turnover went down 2.8% against March. It was estimated to reach US $29.360 billion in the first four months, up 71% compared to the same period in 2007. The excess of import over export in this period was US $11.1 billion, equivalent to 60.8% of the export turnover.
The Ministry of Finance reported that, in first four months, the excess of import over export reached US $11.1 billion, equivalent to 60.8% of export turnover.
In his message on dealing with difficulties and obtaining sustainable socio-economic development, the PM emphasized that “the trade balance is a very important macro index. Trade deficit which increased in 2007 and kept going up in the first quarter of this year is threatening the macro-economic balance. This problem must be settled through boosting export and controlling import.”
To realise the PM’s directions, some technical barriers have been lifted to reduce the trade deficit. Export tax rate of minerals has been readjusted to control the export of raw materials: coal raised from 10% up to 15%, crude oil to 8%, pure and raw iron-ore to 20%. Import tax and special consumption tax have been raised for some luxury products, including CBU automobiles, spare parts, and electronic products.
Machinery and equipment continue to be imported to serve domestic production
In order to guarantee capital resources for producers and traders of exports, the State Bank confirmed, the credit structure has been readjusted towards increasing loans for effective projects, export and agricultural activities, rural areas, poor households and social policy-beneficiaries.
It was reported that the export turnover in the first four months was US $18.260 billion, up 27.6% as compared to the same period last year. Increases were seen in the turnover of most of exports in comparison with the same period of 2007, such as rice up 72.7%, plastic products 34.1%, tea 34%, textiles 24.5%, rubber 23.7%, wood furniture 22.5 %, and aqua-products 13.6%.
The April import turnover went down 2.8% against March. It was estimated to reach US $29.360 billion in the first four months, up 71% compared to the same period in 2007. The excess of import over export in this period was US $11.1 billion, equivalent to 60.8% of the export turnover.
Ministry urges stronger risk management for stock market
22:40' 04/05/2008 (GMT+7)
Market regulators need better policies and procedures in place to manage crises and emergencies that may arise on the nation’s stock exchanges, the Ministry of Finance said in a decision earlier this week, recommending a project be set up to create and model such policies.
The measure was one of five economic recommendations that the ministry set forth in the decision.
The decision also said that regulators needed to establish without further delay an over-the-counter (OTC) market under the administration of the Ha Noi Securities Trading Centre, a step formally approved last year to reduce risks to investors in unsupervised OTC trading.
Regulators also needed to establish detailed criteria for listed companies to offer additional shares, the ministry decision stated.
"These things, although not new, will contribute to giving investors more optimism in their trading," said Nguyen Tien Dung, an independent analyst. "They should have been done earlier."
Dung said a project to devise responses to market crises and detailed regulation on additional offers were most needed at this time because they would help the market avoid some of the steep declines of the past.
"As of now, the overload of shares seems to be the main reason for the reversal of the exchange. If we had had an obvious plan to solve it from the outset, the market would not have fallen as deeply as it has."
The decision also addressed mechanisms for foreign investors as well as management of foreign capital inflows to the domestic exchange.
The decision was regarded as good news for investors during this week’s market holiday.
"The market could rebound early next week thanks in part to this news," Dung said. "But, whether it can spur the market depends on how long it takes to implement the proposed project."
Market regulators need better policies and procedures in place to manage crises and emergencies that may arise on the nation’s stock exchanges, the Ministry of Finance said in a decision earlier this week, recommending a project be set up to create and model such policies.
The measure was one of five economic recommendations that the ministry set forth in the decision.
The decision also said that regulators needed to establish without further delay an over-the-counter (OTC) market under the administration of the Ha Noi Securities Trading Centre, a step formally approved last year to reduce risks to investors in unsupervised OTC trading.
Regulators also needed to establish detailed criteria for listed companies to offer additional shares, the ministry decision stated.
"These things, although not new, will contribute to giving investors more optimism in their trading," said Nguyen Tien Dung, an independent analyst. "They should have been done earlier."
Dung said a project to devise responses to market crises and detailed regulation on additional offers were most needed at this time because they would help the market avoid some of the steep declines of the past.
"As of now, the overload of shares seems to be the main reason for the reversal of the exchange. If we had had an obvious plan to solve it from the outset, the market would not have fallen as deeply as it has."
The decision also addressed mechanisms for foreign investors as well as management of foreign capital inflows to the domestic exchange.
The decision was regarded as good news for investors during this week’s market holiday.
"The market could rebound early next week thanks in part to this news," Dung said. "But, whether it can spur the market depends on how long it takes to implement the proposed project."
India trade to reach $2 billion in 2008
17:20' 04/05/2008 (GMT+7)
A Dien Quang Light Bulb Co worker controls a compact bulb production line. Bilateral trade with India is set to reach US$2 billion this year.
VietNamNet Bridge - Two-way trade between India and Vietnam is expected to reach US$2 billion in 2008, two years ahead of goals set in the joint statement issued nearly one year ago when the two countries established a strategic partnership.
With a population of 1.1 billion people and the second highest GDP growth rate in Asia, India offers good opportunities for Vietnamese markets, said Vietnam’s ambassador to India, Vu Quang Diem.
Major exported goods from Vietnam to India include pepper, rubber, computer hardware and electronic products, cinnamon bark and spice, and garment and textile products.
According to Diem, Vietnamese goods are competitive in the Indian market, evidenced by a 20 per cent annual growth rate in Vietnam’s exports to India over the past few years.
However, two-way trade between the two countries remains "modest," with the trade balance being in India’s favour.
The economic development gap is one of the major hinderances for trade promotion between India and Vietnam, Diem said.
The ASEAN-India Free Trade Agreement and the Vietnam-India Free Trade Agreement, soon to be signed, should promote trade between the two nations.
These agreements will create more favourable conditions for Vietnamese goods and enhance their market shares in the Indian market, said Diem.
2008 is a transitional year to implement the joint statement on strategic partnership between India and Vietnam.
The Vietnamese embassy in India is preparing campaigns to promote Vietnamese products and tourism. A number of Indian operations will be recommended to Vietnam for business and investment activities.
According to Diem, Prime Minister Nguyen Tan Dung’s visit to India in July 2007 helped bring in big investment projects from India to Vietnam.
These include the $527 million steel refinery project in Ba Ria-Vung Tau Province, the Indian Essar group’s $600 million oil exploration and exploitation project and two big steel projects with a more than $4 billion investment in Tata group in Ha Tinh Province. Last year India ranked sixth in foreign investment in Vietnam.
A Dien Quang Light Bulb Co worker controls a compact bulb production line. Bilateral trade with India is set to reach US$2 billion this year.
VietNamNet Bridge - Two-way trade between India and Vietnam is expected to reach US$2 billion in 2008, two years ahead of goals set in the joint statement issued nearly one year ago when the two countries established a strategic partnership.
With a population of 1.1 billion people and the second highest GDP growth rate in Asia, India offers good opportunities for Vietnamese markets, said Vietnam’s ambassador to India, Vu Quang Diem.
Major exported goods from Vietnam to India include pepper, rubber, computer hardware and electronic products, cinnamon bark and spice, and garment and textile products.
According to Diem, Vietnamese goods are competitive in the Indian market, evidenced by a 20 per cent annual growth rate in Vietnam’s exports to India over the past few years.
However, two-way trade between the two countries remains "modest," with the trade balance being in India’s favour.
The economic development gap is one of the major hinderances for trade promotion between India and Vietnam, Diem said.
The ASEAN-India Free Trade Agreement and the Vietnam-India Free Trade Agreement, soon to be signed, should promote trade between the two nations.
These agreements will create more favourable conditions for Vietnamese goods and enhance their market shares in the Indian market, said Diem.
2008 is a transitional year to implement the joint statement on strategic partnership between India and Vietnam.
The Vietnamese embassy in India is preparing campaigns to promote Vietnamese products and tourism. A number of Indian operations will be recommended to Vietnam for business and investment activities.
According to Diem, Prime Minister Nguyen Tan Dung’s visit to India in July 2007 helped bring in big investment projects from India to Vietnam.
These include the $527 million steel refinery project in Ba Ria-Vung Tau Province, the Indian Essar group’s $600 million oil exploration and exploitation project and two big steel projects with a more than $4 billion investment in Tata group in Ha Tinh Province. Last year India ranked sixth in foreign investment in Vietnam.
Friday, 2 May 2008
VietJetAir prepared for competition
15:12' 02/05/2008 (GMT+7)
The country's third air carrier VietJet Aviation Joint Stock Co. (VietJetAir) is cooperating with PARC Aviation in recruiting senior executives to prepare for its operations in Vietnam. Robert Hughes, managing director of VietJetAir, talks with the Daily how the first private airline in Vietnam has readied itself for the take-off scheduled for late this year. Excerpts follow:
Could you elaborate on the agreement with PARC Aviation and what the Dublin firm can help with employment?
PARC Aviation will provide qualified pilots and officers who have the appropriate licenses and type ratings for the planes hat we will fly. The firm will also help us search for other specialists in aviation including managers with experience in other airline functions such as revenue and yield management. We have already consulted with PARC Aviation in building our business plan.
It is not easy to hire qualified aviation staff at the moment. How could VietJetAir do that only months ahead of the departure?
We have already sourced several qualified staff for our operations, and will train others to fill the short-term demand. For the longer term we will finalize agreements with training institutes for engineers. In addition, we are planning a pilot training scheme to train our own pilots. This is not a short-term easy solution; it will take many years to develop a team of qualified pilots and engineers.
Has VietJetAir signed any contract for aircraft lease or purchase, and how many aircraft does the company plan to have in the initial period of operations?
We are still in negotiations on aircraft, so I cannot divulge any details until the final agreement. Our negotiations involve up to 10 aircraft introduced into the fleet in the first two years while routes and operations are fine-tuned. Given the current economic instability in the global aviation market, we are being conservative, yet taking advantage of opportunities to secure capacity in the market. We will initially lease aircraft, but purchase them as soon as possible to reduce overall costs. Our planes will have approximately 130 economy class seats, and 12 premium-economy seats.
We will only have one type of aircraft, either Boeing 737s or Airbus 320s. We are focused on short-haul operations, between one and five hours, so we do not need a mixed fleet. This will help us control costs since we will only need one type of pilots, only one type of engineers, only one set of spare parts, etc. We expect to begin with two or three planes; add two or three more planes shortly thereafter, and add an additional five in the following year.
Will VietJetAir follow the standards of a low-cost carrier or a full-serviced airline?
Several low-cost carriers have learned that there is demand for a premium economy and have adjusted their offerings for the customer demand. For example, in Asia we have seen Nok Air add a premium economy class; in Australia Virgin Blue has also added a premium economy class; and in the U.S. JetBlue has many features not available in low-cost carriers. We believe there is a market for such an offering and will be fine-tuning our product for the market based on customer demand. Our fares will be competitive, since we will maintain a lean cost structure.
So, when will people be able to book fares for VietJetAir flights?
We will set our fares few months prior to departure, and will allow booking of flights at that time. Since we will initially fly domestically, the international fares will wait for another year or so.
It is said that several low-cost carriers are on the brink of bankruptcy due to soaring fuel prices. Does this problem affect or cause any delay in the take-off schedule of VietJetAir?
We still plan to depart in December 2008. The airline industry is in turmoil because of the fuel prices. The industry must raise fares to stay profitable and we believe this will reduce demand for air traffic somewhat, but we believe there will still be strong demand despite the higher fuel prices and fares. We expect that there will be some stability in the fuel price by the time we commence operations, and we will be able to set our fares at that. We are working to keep all other costs under control so we can keep fares competitive.
Do you think that licensing VietJetAir is an important mark in the opening of Vietnam's aviation industry to private investors?
Yes, this will allow increased mobilization of capital into an important sector of the economy. As the transportation infrastructure and offerings expand, this has indirect benefits to other sectors. Opening up sectors of the economy benefits consumers and service providers.
Vietnam is developing in many ways, with business expanding and tourism increasing. Both of these factors lead to increased demand in air travel. And with the tourism infrastructure that is being developed throughout the country, we see great opportunity for increased air traffic in the future. The challenge will be that other airlines see the same potential. This is the reality of business, and we are prepared to compete.
Vietnam's aviation sector is moving in the same direction that other countries have moved, but in Vietnam's own timeline. Neighboring countries that have opened up the industry have seen benefits from the increased air traffic. We expect the same benefits here in Vietnam.
The country's third air carrier VietJet Aviation Joint Stock Co. (VietJetAir) is cooperating with PARC Aviation in recruiting senior executives to prepare for its operations in Vietnam. Robert Hughes, managing director of VietJetAir, talks with the Daily how the first private airline in Vietnam has readied itself for the take-off scheduled for late this year. Excerpts follow:
Could you elaborate on the agreement with PARC Aviation and what the Dublin firm can help with employment?
PARC Aviation will provide qualified pilots and officers who have the appropriate licenses and type ratings for the planes hat we will fly. The firm will also help us search for other specialists in aviation including managers with experience in other airline functions such as revenue and yield management. We have already consulted with PARC Aviation in building our business plan.
It is not easy to hire qualified aviation staff at the moment. How could VietJetAir do that only months ahead of the departure?
We have already sourced several qualified staff for our operations, and will train others to fill the short-term demand. For the longer term we will finalize agreements with training institutes for engineers. In addition, we are planning a pilot training scheme to train our own pilots. This is not a short-term easy solution; it will take many years to develop a team of qualified pilots and engineers.
Has VietJetAir signed any contract for aircraft lease or purchase, and how many aircraft does the company plan to have in the initial period of operations?
We are still in negotiations on aircraft, so I cannot divulge any details until the final agreement. Our negotiations involve up to 10 aircraft introduced into the fleet in the first two years while routes and operations are fine-tuned. Given the current economic instability in the global aviation market, we are being conservative, yet taking advantage of opportunities to secure capacity in the market. We will initially lease aircraft, but purchase them as soon as possible to reduce overall costs. Our planes will have approximately 130 economy class seats, and 12 premium-economy seats.
We will only have one type of aircraft, either Boeing 737s or Airbus 320s. We are focused on short-haul operations, between one and five hours, so we do not need a mixed fleet. This will help us control costs since we will only need one type of pilots, only one type of engineers, only one set of spare parts, etc. We expect to begin with two or three planes; add two or three more planes shortly thereafter, and add an additional five in the following year.
Will VietJetAir follow the standards of a low-cost carrier or a full-serviced airline?
Several low-cost carriers have learned that there is demand for a premium economy and have adjusted their offerings for the customer demand. For example, in Asia we have seen Nok Air add a premium economy class; in Australia Virgin Blue has also added a premium economy class; and in the U.S. JetBlue has many features not available in low-cost carriers. We believe there is a market for such an offering and will be fine-tuning our product for the market based on customer demand. Our fares will be competitive, since we will maintain a lean cost structure.
So, when will people be able to book fares for VietJetAir flights?
We will set our fares few months prior to departure, and will allow booking of flights at that time. Since we will initially fly domestically, the international fares will wait for another year or so.
It is said that several low-cost carriers are on the brink of bankruptcy due to soaring fuel prices. Does this problem affect or cause any delay in the take-off schedule of VietJetAir?
We still plan to depart in December 2008. The airline industry is in turmoil because of the fuel prices. The industry must raise fares to stay profitable and we believe this will reduce demand for air traffic somewhat, but we believe there will still be strong demand despite the higher fuel prices and fares. We expect that there will be some stability in the fuel price by the time we commence operations, and we will be able to set our fares at that. We are working to keep all other costs under control so we can keep fares competitive.
Do you think that licensing VietJetAir is an important mark in the opening of Vietnam's aviation industry to private investors?
Yes, this will allow increased mobilization of capital into an important sector of the economy. As the transportation infrastructure and offerings expand, this has indirect benefits to other sectors. Opening up sectors of the economy benefits consumers and service providers.
Vietnam is developing in many ways, with business expanding and tourism increasing. Both of these factors lead to increased demand in air travel. And with the tourism infrastructure that is being developed throughout the country, we see great opportunity for increased air traffic in the future. The challenge will be that other airlines see the same potential. This is the reality of business, and we are prepared to compete.
Vietnam's aviation sector is moving in the same direction that other countries have moved, but in Vietnam's own timeline. Neighboring countries that have opened up the industry have seen benefits from the increased air traffic. We expect the same benefits here in Vietnam.
Vietnam not very keen on rice cartel
18:00' 02/05/2008 (GMT+7)
“Vietnam is not very keen on this idea. This is not the first time the idea has been proposed by Thailand,” said a senior official from the Ministry of Industry and Trade about a statement by Thai Prime Minister Samak Sundaravej that Vietnam had agreed to join a rice exporters’ cartel.
According to CNN, Samak told press in Bangkok Wednesday that Thailand, Vietnam, Cambodia, Laos and Myanmar had agreed in principle to form an Organization of Rice Exporting Countries, which would attempt to fix the price of rice on the international market.
However, a Deputy Minister of Industry and Trade told VietNamNet that Vietnam, the world’s second largest rice exporter after Thailand, has not yet made any official reaction to the initiative and a delegation from Thailand is coming to Vietnam to discuss it.
“The issue is really sensitive, so we are still carefully considering all aspects of it,” the official said.
The Thai announcement led to concern on the part of rice importing countries, many of them poor, who face the prospect of rice shortages and hunger due to the 80 percent rise in rice prices since the start of the year.
Rising rice prices are part of an overall increase in world food prices which UN’s World Food Programme recently called a tsunami that could drive many of the world’s poorest people to the brink of starvation.
Laos Foreign Ministry spokesman Yong Chanthalansy said Friday the Laotian government would "seriously consider" the idea of creating a cartel to gain "bargaining power," AP reported.
According to AP, Cambodia, which in the past has championed the rice cartel idea, also welcomed the latest proposal and said it was a "necessity" given the current global food crisis.
In early April, the Indian government announced a ban on exports of low-grade rice, which is essentially produced for domestic consumption, in an effort to control a surge in local food prices amid tightening supplies.
Vietnam and Cambodia, other major rice producers, also have placed restrictions on rice exports.
Meanwhile, Thailand recently decided to release more than two million tons of rice to the domestic market in order to maintain the price of rice in the country.
“Vietnam is not very keen on this idea. This is not the first time the idea has been proposed by Thailand,” said a senior official from the Ministry of Industry and Trade about a statement by Thai Prime Minister Samak Sundaravej that Vietnam had agreed to join a rice exporters’ cartel.
According to CNN, Samak told press in Bangkok Wednesday that Thailand, Vietnam, Cambodia, Laos and Myanmar had agreed in principle to form an Organization of Rice Exporting Countries, which would attempt to fix the price of rice on the international market.
However, a Deputy Minister of Industry and Trade told VietNamNet that Vietnam, the world’s second largest rice exporter after Thailand, has not yet made any official reaction to the initiative and a delegation from Thailand is coming to Vietnam to discuss it.
“The issue is really sensitive, so we are still carefully considering all aspects of it,” the official said.
The Thai announcement led to concern on the part of rice importing countries, many of them poor, who face the prospect of rice shortages and hunger due to the 80 percent rise in rice prices since the start of the year.
Rising rice prices are part of an overall increase in world food prices which UN’s World Food Programme recently called a tsunami that could drive many of the world’s poorest people to the brink of starvation.
Laos Foreign Ministry spokesman Yong Chanthalansy said Friday the Laotian government would "seriously consider" the idea of creating a cartel to gain "bargaining power," AP reported.
According to AP, Cambodia, which in the past has championed the rice cartel idea, also welcomed the latest proposal and said it was a "necessity" given the current global food crisis.
In early April, the Indian government announced a ban on exports of low-grade rice, which is essentially produced for domestic consumption, in an effort to control a surge in local food prices amid tightening supplies.
Vietnam and Cambodia, other major rice producers, also have placed restrictions on rice exports.
Meanwhile, Thailand recently decided to release more than two million tons of rice to the domestic market in order to maintain the price of rice in the country.
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