Arguing that JPA doesn’t meet the requirements for management apparatus (the rate of foreigners not allowed to exceed one-third), VCAA on October 31 refused to grant rights to JPA to offer 10 new international air routes to China, Taiwan, Hong Kong, Macau, Malaysia, Indonesia, South Korea, Japan, Thailand and Laos.

VCAA also told JPA it couldn’t use icons with the word “JET” and an orange star and “Jetstar – orange star”. The reason given by VCAA was that the licence the Transport Ministry granted to JPA on September 15, 2008 didn’t have regulations on icons.

VCAA said that while JPA was waiting to meet conditions on management apparatus, the firm is only permitted to fly to four destinations, which were licenced in the past: Bangkok (Thailand), Phnom Penh and Siem Reap (Cambodia) and Singapore.

JPA said that VCAA’s refusal is groundless because in its business licence, JPA is permitted to offer domestic and international air routes.

In its petition to the Transport Ministry, JPA said the VCAA doesn’t have the authority to manage labels and intellectual property. It says permitting or not allowing a company to use a brand or label must be based on the Intellectual Property Law and be decided by competent agencies. Moreover, regulations on brands and labels are regulated by the Intellectual Property Law, not the Aviation Law.

About the rate of foreigners in its management apparatus, JPA said the Transport Ministry gave it permission to take two years to finalise its transformation.

The licence granted to JPA also notes that the firm’s transportation scope is domestic and international, without any restriction.

JPA has petitioned the Transport Ministry to force VCAA to withdraw its ban and make an official decision about the use of brands under the Intellectual Property Law.

The State Capital Investment Corporation (SCIC), which holds 81% of shares in JPA, also asked the Transport Ministry to overturn the decisions by VCAA. SCIC said that in the restructuring strategy of Pacific Airlines (which is now Jetstar Airlines), this firm is allowed to operate as a low-cost airline and compete equally with others.

According to SCIC, VCAA’s refusal to grant business rights to open ten new international air routes is groundless and seriously affects JPA’s business.

There are six companies that offer aviation services in Vietnam but Vietnam Airlines still accounts for over 80% of the domestic market. This firm almost has a monopoly of the international market. The state only controls the airfares of economy tickets on local routes and airlines themselves set airfares for international routes.

The countries which JPA asked for flight rights to have many airlines which are allowed to fly to Vietnam: Thailand with four airlines (Thai Airway, Thai Air Asia, Nok Air Bangkok Airways); Malaysia with two (Malaysia Airlines, Air Asia); China with four (China Southern, Air China, Shanghai Airlines, Shengzhen Airlines); Hong Kong with three (Cathay Pacific, Hong Kong Airlines, Dragon Air), Taiwan with four (China Airlines, Eva Airways, Uni Air, Mandarin Airlines), South Korea with two (Korean Air, Asiana Airlines), Japan two (Japan Airlines, All Nippon Airways) and Indonesia two (Garuda Indonesia, Lion Air). Meanwhile, on these air routes, Vietnam has only one – Vietnam Airlines.