Vietnam, USA ready for first direct flights since war

[vietnampassion]

Vietnam and the United States initialled on Thursday an air services agreement that would allow direct passenger and cargo flights, tapping a surge in trade and travel between the former war foes.

Neither side provided a time frame for ratifying the agreement, but it was expected this could take place within a few months. Several U.S. carriers said they thought the first direct flights from America might begin next March.

Vietnam Airlines said it was unsure when its jets would land in the United States. Prior to the pact, it had planned to do so in 2006. Now, "we hope we can cut short the time," said Pham Ngoc Minh, executive vice president in charge of commercial affairs.

The unlisted airline said two-way passenger traffic is between 270,000 and 280,000 people a year, and has been growing at between five and seven percent a year. The pact should double that growth rate in the next few years, Minh said.

"This is a good stepping stone and will help to integrate our economies much better," said Laura Faux-Gable, deputy director of the State Department's Office of Aviation Negotiations, who led the American delegation. Nine U.S. carriers were represented.

Hanoi also expressed delight. "It paves the way for further economic and cultural exchange" between the two countries, Pham Vu Hien, deputy head of the Civil Aviation Administration of Vietnam, told a news briefing after the pact was initialled.

Third-country flights

A bilateral trade pact that went into effect in December 2001 resulted in a 128 percent surge in exports from Vietnam to the United States in 2002. American exports to Vietnam grew 26 percent last year.

In the first nine months of 2003, 159,080 Americans visited Vietnam. U.S. citizens comprise the second-biggest group of visitors to Vietnam after China.

U.S. carriers serving the communist country now fly to a third country, such as Japan, and put their passengers on connecting flights operated by partner airlines.

U.S. cargo operators have been leasing space from carriers with direct links to Vietnam, which has the fastest growing economy in Southeast Asia.

First talks on an aviation link began in 1998, three years after the countries normalised relations following the 1975 end of the Vietnam War.

The five-year pact, which will be renegotiated at the fourth year, allows two passenger carriers on each side to operate directly for the first two years, with another permitted in the third year. The five years start after the pact is signed.

If more than two U.S. airlines want to start direct flights, the U.S. Department of Transportation will choose among the applications.

Washington had to give certain unusual concessions, including agreeing that its planes would not pick up passengers when stopping in third countries en route to Vietnam. Vietnam Airlines fears permitting this would hurt its competitiveness.

Still, the American carriers at the talks said they were satisfied. "Delta is fine with the agreement," said Charlene Kennedy, manager of Delta Air Lines Inc's government affairs.

Minh declined to say to which city Vietnam Airlines might inaugurate its flights, but noted that San Francisco, home to many overseas Vietnamese, was a "preferable" destination. Some 1.5 million ethnic Vietnamese live in America.

On Wednesday, a spokesman for the U.S. State Department said the United States would like to liberalise aviation ties with Vietnam further through an Open Skies agreement.

Vietnam said it was receptive to this, but did not offer a specific deadline.
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