VietJetAir and aviation services firm Vector Aviation are not deterred by falling air cargo numbers.
Despite cargo volumes sinking 13 per cent on-year in the first four months of 2012 the firms have teamed up to establish an air cargo transport alliance.
Vietnam Civil Aviation Administration of Vietnam figures show that 187,000 tonnes of freight were transported by air in Vietnam in 2011, surging just 4.8 per cent against 2010.
International Aviation Transport Association (IATA), however, forecast those were stopgap difficulties and within the next three years Vietnam could grow into the world’s third fastest passenger and freight transport market with 10 per cent annual growth until 2014.
The tie-up with VietJetAir is a ‘springboard’ to help Vector Aviation make true its ambition to found a cargo transport airline.
Vector Aviation will lease VietJetAir’s freight transport licence to bring cargo freighters into service in the domestic market, then fly international routes.
The freighters will carry VietJetAir’s logo and jointly handle services after finalising profit-sharing negotiations.
VietJetAir deputy director Nguyen Duc Tam said air cargo transport would have great potential for development in Vietnam on the back of soaring demand for freight transport.
Electronics, handsets and fruits are common goods transported between these two regions by air.
To procure enough capital to step into this promising market, Vector Aviation’s parent company Vinafreight is set to hike Vector Aviation’s chartered capital to VND160 billion ($7.6 million) from VND56 billion ($2.6 million) via issuing 10.4 million shares additionally.
Vinafreight wanted to found a cargo transport airline for Vector Aviation to operate from 2012’s second quarter.
At this point of time, Vector Aviation bought freight transport capacity of VietJetAir’s Airbus A320 fleet (around two tonnes of freight per flight) in local routes and paid the low-cost airline all relevant expenses.
Of these proposed 10.4 million shares, three million shares would be dedicated to a strategic partner at price not lower than VND25,000 ($1.2) per unit, said Vector Aviation’s director Do Xuan Quang.
However, since the stock market is still in a fix, Vinafreight has yet to sell these three million shares.
Quang said competing with big international airlines and local giant Vietnam Airlines was a great challenge. As of mid-April 2012 Vietnam Airlines held a 33.7 per cent of air freight transport market share, including 17 per cent in international routes and 89.4 per cent on local routes.