Airline to transfer aircraft to new subsidiary as it focuses on longer-distance routes, including non-stop to Paris

Vietnam Airlines is to spin off some domestic and short-haul international services from its mainline operation in 2005 through the launch of Vietnam Airlines Express. The fast-growing carrier is, meanwhile, planning to lease additional Airbus A321s this year.

Director of marketing planning Luong Hoai Nam says the new entity will be formed through the overhaul of wholly owned air charter subsidiary Vietnam Air Services.

The all-economy arm "will fly mostly short-haul domestic flights and to neighbouring countries to feed Vietnam Airlines' network," says Nam. Vietnam Airlines will transfer seven ATR 72s to the subsidiary, possibly along with its two Fokker 70s. Plans call for the fleet to remain at that size for around five years, after which it will be expanded.

Vietnam Airlines has expanded rapidly in recent years and has been considering hiving off some operations to focus on medium- and long-haul services. Last year it carried just over 4 million passengers, a rise of around 18% on 2001.

The airline has said it plans to open new routes to Cambodia, China, India and Indonesia this year while expanding its fleet with additional Airbus A321s and its first Boeing 777s. It also plans to begin non-stop services to Paris this summer, bypassing Dubai - its current transit point for European services.

Vietnam Airlines last year placed firm orders with Airbus for five A321s, after ordering six 777-200ERs through lease and purchase arrangements in 2001. It is also looking to lease at least one more A321 to join three leased examples, the third of which was only added last month.

Source: Flight International