Vietnam Airlines moves to join SkyTeam alliance

Dominique Patry, chairman of SkyTeam Steering Committee, addresses the news conference in Hanoi after the signing ceremony on Wednesday - Photo: Thanh Trung
HCMC, HANOI - Vietnam Airlines signed an agreement with SkyTeam on Wednesday in a move to join the global airline alliance, probably next year, enabling the national flag carrier to fly to more markets and provide more benefits to passengers.
Pham Ngoc Minh, general director of Vietnam Airlines, described the agreement the airline signed in Hanoi as important as it was the first step for the carrier to become a full member of SkyTeam, hopefully in 2010.
“The agreement confirms Vietnam Airlines’ position as a major airline in the region and a global reliable partner of SkyTeam in competing with other global airline alliances,” Minh said in a statement.
Minh added Vietnam Airlines would be able to provide passengers with thorough services in accordance with international standards of SkyTeam when the airline became a full member of the world’s second largest airline alliance after STAR Alliance.
Vietnam Airlines said in the statement that it was the only partner airline in Southeast Asia that SkyTeam had chosen to become its member.
Speaking to reporters after the signing on Wednesday, the air carrier’s deputy general director Duong Tri Thanh said joint operations, frequent flyer programs and airport services would be the three areas of most important cooperation among alliance members. Thanh said Vietnam Airlines had considered three air alliances over the past ten years before deciding to apply for SkyTeam membership.
Dominique Patry, chairman of SkyTeam Steering Committee, said Vietnam Airlines would give great support to the flight network of SkyTeam and help expand its presence, especially in Indochina.
“With wide flight coverage and services to more than five gateway airports of SkyTeam, Vietnam Airlines will be a strategic partner of SkyTeam,” said Patry, who is Air France’s vice president for international affairs and alliances.
He told reporters it often took airlines some two years to complete all admission formalities, but “I hope Vietnam Airlines will complete all formalities within 12 months.”
Vietnam Airlines now uses 50 aircraft of different types including Boeing 777s, Airbus A330s, A321s and A320s for its flights to 20 domestic destinations and 24 international destinations.
Despite the global economic turmoil, Vietnam Airlines last year posted a year-on-year revenue increase of 31.32% to more than VND26.6 trillion (over US$1.5 billion), including pre-tax profit of VND240 billion (some US$13.7 million).
The significant pre-tax profit marked a great achievement for Vietnam Airlines as this carrier incurred a loss of VND83 billion (more than US$4.7 million) in the first half of 2008.
Vietnam Airlines is looking to transport nearly 9.5 million passengers on its domestic and international flights this year, as against more than 8.8 million passengers last year.
Minh said earlier this year that 2009 would be a difficult year for the airline industry but the carrier would continue to improve competitiveness and kept following a long-term development strategy to become the second largest airline in the region after Singapore Airlines in the next seven to eight years.
Established nine years ago, SkyTeam now has 10 member airlines and three associate airlines including Air France-KLM, Continental Airlines, China Southern, Korean Air, and Northwest. These carriers with 2,500 airplanes now operate flights to 905 destinations in 169 countries and territories, transporting 462 million passengers a year.

Panalpina launches Vietnam unit

HCMC – Panalpina World Transport (Vietnam) Co., Ltd, a subsidiary of Panalpina, the global forwarding and logistics service provider, on Thursday made its first public appearance in HCMC.
Panalpina set up the company in Vietnam through a joint venture with a local partner in Vietnam, after nearly 15 years of operating here as a representative office.
The new office in HCMC is located at the Seagull Building, 39B Truong Son Street, Tan Binh District, next to the Tan Son Nhat International Airport and the international cargo terminal.
The Vietnam unit will support Panalpina’s goals to further grow and increase its market shares, particularly in the field of supply chain management and project shipments as well as in oil and gas, retail, fashion and telecommunications, according to Panalpina.
Panalpina CEO Monika Ribar Baumann told the opening ceremony that Panalpina Vietnam was an important member of the worldwide Panalpina family which incorporates a network linking all major trade lanes. The group operates own organizations in over 80 countries. The strength of the group is one of the big assets of this company, combining global know-how and purchasing power with local expertise, Baumann said.
Vietnam plays an important role in Panalpina’s strategy to gain an additional market share in Asia and to become a partner of choice for seamless supply chain management solutions, she said.
Despite the current financial and economic crisis, Panalpina continues to invest in its service portfolio, product development and staff education, she said, adding that opening the office of its new subsidiary in HCMC would allow the group to expand business activities. Vietnam is a potential market for Panalpina, she said.
Matthew Mahoney, managing director of Panalpina World Transport (Vietnam) Co., Ltd, told the Daily he believed his company would grow in Vietnam, despite the increasingly bad news about the state of the global economy and the financial markets.
Vietnam attracted a lot of big investors last year, especially in the north, so they will deploy their projects soon, he said.
Panalpina has been present in Vietnam for almost 20 years, and has achieved considerable growth and had a fruitful relationship with its long-time partner Vinatrans, one of the major Vietnamese freight forwarding companies under the Ministry of Trade (now the Ministry of Industry and Trade).
Panalpina Vietnam last year increased its ocean freight volumes by about 14% and its air freight tonnage by 24% year-on-year. A major milestone was set in December 2008 when the company became fully operational.
“Panalpina is one of the leading providers of supply chain management and transport services in Vietnam. Last year, with some 70 employees we achieved major growth in the ocean freight and air freight business field. And we will continue to grow,” Baumann said.
The financial and economic crisis has impacted on Panalpina, said Monika. “As a global logistics and transport company we are directly affected if less products are produced and sold, thus the global trade volumes are growing less than in previous years, or even declining.”

Stronger selling douses market

HCMC – A strong flood of selling orders on the market on Thursday doused the market although the sentiment turned stronger on Thursday upon news of strong rallies on global markets, resulting a mild decline on the VN-Index, which eased 2.04 points, or 0.65%, from the previous session to 311.72 points.
The Hochiminh Stock Exchange reported investors bid for 78.5 million shares, decreasing 11% from the session earlier, while the amount on offer sprang up by a staggering 62% to 81.8 million shares. At the end of the session, the market’s total trading volume was 35.6 million shares worth VND850.8 trillion.
The market saw 57 stocks increasing and 89 others falling, including 21 stocks hitting the ceiling prices and 18 others falling to the floor prices.
Sacombank (STB) once again was the most actively traded stock on the bourse, increasing 2.1% to VND18,400 each on traded volume of 3.87 million shares. Saigon Securities Inc. (SSI), the second most traded stock, was up 4.89% to VND36,500 on volume of 2.28 million shares. Saigon Cables and Telecommunication Co. (SAM) rose 4.97% to VND19,000 with 2.18 million shares changing hands.
Most of other large cap stocks including Vinpearl Trading and Tourism Co. (VPL), Pha Lai Thermal Power Co. (PPC), Vinamilk (VNM), and PetroVietnam Fertilizer and Chemicals Co. (DPM) fell on the day.
Foreign investors were heavy net sellers as they reduced buying value by 72% to VND19.5 billion worth of 679,400 shares and sold 2.28 million shares worth VND56.5 billion.
Vietnam International Securities Co. (VIS) in its daily report said that investors would continue taking profit and restructuring their portfolios given first quarter earning reports published by listed firms.
“The VN-Index would possibly set aside and move around 310-315 points for the time being,” said the report.
Meanwhile, Dai Viet Securities Co. in its daily report said that the market’s trend was still unclear as two correct sessions were normal after the strong increase in several sessions earlier. In addition, despite lower trading volume, it was still at high level that meant the market might bounce back again.
Fiachra Mac Cana, managing director of HCMC Securities Corp. (HSC), said in a report that key issues such as SAM, SSI, KLS and REE were strong on Thursday suggesting that any correction was going to be fairly shallow.
“However our quant desk reminds us that unless the market stages a recovery tomorrow we may see further profit taking next week. Hence tomorrow is a key day for the market short term. Close up and the rally will be back in active mode. Close flat or down and we may see further modest declines next week,” he added.
Not like the southern bourse, Hanoi’s market rose 2.56 points, or 2.35%, from the session earlier to 111.49 points due to support from large cap stocks like ACB, BVS, KBC. The market’s total trading volume was 20.1 million shares worth VND486 billion, decreasing one-third from the session earlier.
There were 58 stocks advancing and 92 others falling. Foreigners, however, were net buyers on the northern bourse despite at a small margin. They bought 118,000 shares worth VND2.51 billion and sold 122,100 shares worth VND2.47 billion.
The Saigon Times Daily

Major steel projects put on hold

HANOI – A number of huge steel mill projects have been either put on hold or delayed for a long time, particularly those involving India’s Essar Steel, Taiwan’s Thien Huong and Formosa, and Vietnam’s Lilama, Bach Dang and Phu My.
A most recent Ministry of Industry and Trade inspection of key steel projects found that only 17 among 23 steel projects prioritized for implementation in 2007-2015 had got off the ground.
The high-profile project with involvement of Essar Steel with a 65% stake, Vietnam Steel Corp (20%) and Vietnam Rubber Group (15%) has been hanging in the balance. The investors originally planned to inject more than half a billion U.S. dollars into phase one of the hot strip mill with an initial capacity of two million tons a year but Essar is seeking a local partner to transfer its stake.
Nguyen Manh Quan, head of the ministry’s Heavy Industry Department, said in a report on the inspection that the Indian firm had proposed suspending the project in Phu My Industrial Zone in Ba Ria-Vung Tau Province due to financial constraints and tough market conditions.
Taiwan’s Thien Huong stainless steel project was licensed in 2006 but the investor has lost the license due to long delays.
In another 18 steel projects which are being developed in 2007-2015, four have not been able to go ahead as scheduled, including the cold rolled steel plants of Lilama, Formosa and Bach Dang, and phase two of Phu My steel plant.
Pham Chi Cuong, chairman of the Vietnam Steel Association, has suggested strictly monitoring all the licensed steel projects. “If (the projects) fail to conform to the approved schedules without due reasons, their licenses should be revoked.”
Authorities should keep a close watch on the pace of large foreign-invested projects, he said, proposing a ban on stake transfers from one investor to another.
For some projects, work has begun on the first phase only while they occupy a lot of land, affecting other projects, he noted.
Vietnam Steel Corp experts estimated each steel project needed 1,000 to 3,000 hectares of land, excluding land for seaports and support industries.
“Under the current circumstances, the wastefulness of land and long delays in steel projects will cause considerable losses for the places where the projects are located since vast areas of agriculture land have been occupied,” Nghiem Gia of the corporation told a recent roundtable at the Vietnam Steel Association.
The Saigon Times Daily