Vietnam Airlines is trying to apply the brakes on the plan of AirAsia to establish a budget carrier in the latter's home base, asking the government not to approve the joint venture between the Malaysian airline and VietJet Air.
Last month, AirAsia announced it bought a 30 percent stake in the privately own VietJet Air for VND180 million (US$11 million), giving it a foothold in the emerging Vietnam market (see news).
Reports in the local media said Vietnam Airlines has lodged a written petition to prevent joint venture company VietJet AirAsia from taking off. The new budget airline wants to start operating both domestic and international services in May 2010.
In its petition, the flag carrier said that foreign airlines entering into a local joint venture "seriously affect" the development of new domestic airlines in the country.
Vietnam Airlines controls more than 70 percent of domestic passenger traffic nationwide.
If given the green light, the new VietJet AirAsia will go head to head with JetStar Pacific, a local joint venture of Australian-based Qantas and currently the sole low-cost carrier in Vietnam.
Gigi Onag
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