Updated  
March, 10 2005 00:00:00

New staff to revive Pacific Airlines

New staff to revive Pacific Airlines

(10-03-2005)

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 Vietnam Airlines.

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With the two new chartered planes that will replace the two outdated aircraft that the carrier’s previous managers hired, PA is set to save US$500,000 a month.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 said.

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

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