staff to revive Pacific Airlines
HA NOI — Pacific
Airlines (PA) will re-introduce a complimentary transport service for passengers
in a bid to change the fortunes of the loss-making carrier.
In another move to improve
the company’s profit and loss statement the joint-stock air carrier has
announced the appointment of new personnel in two top positions.
Tran Huu Tien, deputy
director of the Ministry of Finance’s(MoF) Enterprise Financing Department has
been appointed chairman of PA management board and Pham Vu Hien, deputy director
of the Ministry of Transport’s Civil Aviation Department is Tien’s deputy.
PA general director Luong Hoai Nam has held onto his position.
A company source said that
the joint stock carrier’s operations are back on the right track following the
new appointments and the recent major share take-over by the MoF of PA from
The MoF now holds a 86.49
per cent stake transferred from Vietnam Airlines. The remaining shares are held
by six companies, including Saigon Tourist Holding Company, Vietnam Air Petro
Company and Southern Airport Services Company.
The MoF, as the largest
shareholder, has started devising plans to restructure the company.
"The Finance Ministry
is paving the way for Pacific Airlines to recover," said PA general
director Luong Hoai Nam.
Nam said the MoF froze the
company’s existing loans and took responsibility to work out appropriate debt
clearance plans. As part of an emergency move, the ministry has guaranteed PA
the charter of new planes.
With the two new chartered
planes that will replace the two outdated aircraft that the carrier’s previous
managers hired, PA is set to save US$500,000 a month.
"A cost effective
charter can save us around VND100 billion ($6.3million) a year," Nam said.
Deputy finance minister Le
Thi Bang Tam said the ministry is considering selling 86 per cent of its shares
of PA, with part of this amount up for grabs for foreign investors.
PA’s newly formed
management board has also reduced airfares by cutting ineffective routes from
flight schedules as well as trimming the fat from the business.
In the first two months of
2005, the joint stock carrier’s flights reached 80 per cent occupancy. Nam
said it is possible that PA will open new flights to Japan, Thailand, Malaysia,
Singapore, and the Republic of Korea in the future.
Pacific Airlines is now
reorganising the ticketing distribution system and upgrading its agents into
standard ticketing offices. It will also introduce e-ticketing shortly.
In the long-run, Nam said
his company was considering budget flights as a new business strategy.
"I think for flights
less than two hours, passengers don’t really care much about food and drink or
entertainment services so a cheaper airfare could be more important," he
However, he added that the
company still needs to do more market research on budget flights to see if they
will be profitable.
By the end of 2004 PA had
run up losses of over VND215 billion (US$13.7 million) during the last 10 years
of its operation. The carrier began flights in 1991 with a capital of VND39
billion ($2.47 million). — VNS