Air Mekong failure due to inappropriate aircraft

On January 6, 2015, Air Mekong officially left the aviation market after two years of halting operation for restructuring the fleet. The failure of the airline was not only bad news for its shareholders, but also for passengers as well.

To avoid direct confrontation with Vietnam Airlines, Air Mekong decided to conquer niche market, exploiting air routes to Phu Quoc, Con Dao Islands and Buon Me Thuot City.

To follow the strategy, the air carrier chose Bombardier CRJ900, the aircraft used for short-distance flights. It both fits the business strategy and created differentiation among other popular aircraft models in Vietnam like Airbus, Boeing and ATR72.

Bombardier CRJ900, with 90 seats, allows tonnage and speed far higher than ATR72 with just 68 seats. 
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However, analysts believed this was a wrong decision. The number of seats in the Canadian aircraft is just equal to a half of Airbus 320 (138 seats), the aircraft with similar size. Meanwhile, the chartering fee of Bombardier CRJ900 was not much lower.

The high cost for the fleet was another problem of Air Mekong. While it could serve fewer passengers than rivals, it still had to pay the same costs for pilots, stewards and land services.

As a result, the receipts were not high enough to cover expenses. 

Analysts commented that Vietnam Airlines, the national flag air carrier, is repeating the same mistake with ATR72-500.

Vietnam Airlines now uses 90 Boeing 787s (with 274 seats), Boeing 777s (309 seats), Airbus A350s (305 seats), Airbus A330s (269 seats), Airbus A321s (184 seats) and ATR 72 (68 seats).

In the latest move, Vietnam Airlines decided to stop using ATRs from 2016 and terminated the 12-year contract with VALC on leasing five ATRs (Vietnam Aircraft Leasing Company) before it becomes mature.

ATR72 uses propeller turbine engine with the advantage of consuming less fuel and producing less noise, while maintenance does not cost too much. With limitation in speed, the aircraft is mostly used for short-distance routes.

However, ATR72 is not a good choice in the context of strong growth of the aviation market. Most of the airports in the world have upgraded to receive jet planes. 

Vietnam Airlines has been certified as a 4-star airline by the UK airline and airport rating organisation Skytrax.

The air carrier announced that it has customized its online check in service, as part of plans to improve service quality and meet the demands of travelers.


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