The Impact of Specialized State Agencies on the Formation and Development of Linkages Is Very Low, Especially in Model Formation

in the group

2.3.4. The impact of specialized state agencies on the formation and development of linkages is very low, especially in the formation of the Tourism - Low-cost Airline linkage model.

Since the first LCA company, JPA, was born more than 7 years ago, there have been

Many conferences promoting the development of Vietnam tourism have mentioned the Tourism LCA linkage. Cooperation in developing Aviation Tourism in the new period was held in April 2010, studies have highly appreciated the cooperation between the two sectors, making the capacity of both sectors develop significantly. However, 3 linkage relationships need to be emphasized. They are:

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Linking businesses in the tourism industry.

Links between tourism and related businesses such as transportation, including aviation.

Linking the state with tourism businesses and tourism-related businesses.

The conference summarized many linkage programs that have been implemented such as: Back to the source tourism; Heritage road; Rivers and gardens; Northwest green route... to point out the strengths and weaknesses of the linkages. When assessing the quality of the linkages, the delegates all affirmed that the linkage chain has been formed, but this linkage is still loose and has not achieved the desired results. Especially the linkage between the state and enterprises, essentially the linkage between specialized state agencies such as the General Department of Tourism and the Civil Aviation Authority of Vietnam with enterprises has not achieved positive results. In particular, state agencies have not really become the "conductors" to organize and operate the linkages in a continuous direction to form a chain of value addition in the composition of complete tourism products to achieve high efficiency.

The idea of association can only be put into practice and achieve its definite goals when it is institutionalized into rules guiding action and is accepted by a

An institution with a complete, compact organization and effective operations in practice. Such an institution and structure can only exist under a tight organizational model, possibly in the form of a joint venture in the form of a multi-industry "economic group" or at least a joint venture in which enterprises separate into a separate unit to coordinate actions according to a common principle and have real effect. Such a form of production and business organization needs to be institutionalized by the coordination of specialized ministries and has strict legality.

A form of association under such a model has not really been formed in our country's practice and has not operated effectively in a socialist-oriented market economy like Vietnam today. However, some necessary premises for the formation and birth of such a model have begun to appear due to the requirements in the practical operation of the tourism industry that it needs to be reorganized and

realized in the LCA and tourism industry of our country.

as soon as possible for the

development of two

2.3.5. The connection between Tourism and foreign low-cost airlines in international economic integration has not been clearly formed.

By 2010, there were nearly 30 foreign airlines that had established representative offices or opened routes to Vietnam, but none of them had a direct cooperation program with the Vietnam National Administration of Tourism. Up to now, the number of foreign airlines participating in exploiting the Vietnamese market has increased and reached 44 airlines from 20 countries and territories traveling to/from Vietnam (as of 2014) with 54 routes from 34 destinations to Hanoi, Ho Chi Minh City, Da Nang, including many LCA airlines, but none of them have officially cooperated or linked with the Vietnam National Administration of Tourism.

On the other hand, LCA Vietnam has just begun to exploit the foreign tourism market: JPA has only flown to a few traditional destinations belonging to the Jetstar group, without any significant connections, while VietJet Air has only exploited the Thai tourism market in the first quarter of 2013. The above situation shows that the capacity of LCA Vietnam is still very small, not strong enough to reach the distant tourism market, while the tourism industry itself lacks initiative and there are only a few companies with the capacity to cooperate, but they are not active and proactive in participating in international connections. This is the biggest limitation in both the tourism and aviation markets of the country today. Because the current process of economic globalization opens the sky, wanting to exploit

have advantage

of other countries forces us to have tools

strong enough

The tool here is to form joint-venture corporations, inter-industry tourism and aviation to join in association with similar economic entities in ASEAN countries and internationally. And according to its rules, if we do not exploit or join in exploiting the domestic market and are defeated right at home. In that condition, the domestic tourism and aviation market will also be dominated by foreign joint ventures and domestic enterprises will be gradually eliminated, which is inevitable. Refer to Figure 2.5 below:

Figure 2.5 Number of passengers flying on the Vietnam - Singapore route and vice versa of LCA Airlines from 2009 to the end of 2014 (Total HANSIN and SGNSIN routes and vice versa) (unit: thousand)

Source: Civil Aviation Authority of Vietnam

Chapter 3

BASIC VIEWPOINTS AND SOLUTIONS TO PROMOTE THE PROCESS OF LINKING LOW-COST AIR TOURISM IN THE CURRENT INTERNATIONAL ECONOMIC INTEGRATION IN VIETNAM

3.1. Potentials, trends and basic perspectives promoting the process of linking Tourism - Low-cost Airlines in international economic integration

3.1.1. Potentials and basic trends promoting the process of linking Tourism - Low-cost Airlines in international economic integration

3.1.1.1. Basic trends promoting the process of linking Tourism - Goods

not cheap in international economic integration in the Asia Pacific region

Since 2000, Vietnam's tourism industry has faced many new favorable opportunities for development, but the industry is facing new difficulties and challenges due to political and economic fluctuations, territorial disputes, ethnic and religious conflicts, terrorism, epidemics and natural disasters in the world as well as changes in the industry's organizational structure. In this situation, state management agencies have quickly supported tourism businesses through the application of the Action Program issued in 2009, focusing on implementing the "Impressive Vietnam" promotion campaign, reducing 50% of value added tax for tourism businesses, postponing the deadline for paying corporate income tax for 9 months, exempting visa fees for international visitors to Vietnam, extending the length of stay for Russian tourists to tourist areas in the Central region, allowing some 3-star and above accommodation establishments to provide entertainment services until 2:00 a.m., etc.

The positive growth results from 2001 to present show the new vitality of the industry with an average annual growth rate of about 27% in the number of international visitors and about 29% in income. However, there is still a decline in the number of international visitors, leading to a decline in tourism income in 2009 due to the profound impact of the global financial crisis. However, WTTC still ranks Vietnam in the top 10 countries in the world in terms of tourism and travel development in the period from 2007 to 2016 because the potential and trends of tourism in our country are in the prospect of improvement. After

Conference

APEC summit

held in Vietnam in 2006, the Ministerial Conference

With the 4th APEC Tourism Ministers Meeting, the 19th APEC Tourism Working Group Meeting and especially the event of Vietnam joining the World Trade Organization (WTO), Vietnam tourism has really flourished. The development of the tourism industry has led to the development of many economic sectors such as: transportation, communications, trade, hotels, restaurants, especially promoting the development of the aviation industry. In the second half of the first decade of the 21st century, LCA was born and developed under the impact of globalization, integration and the trend of development of startups.

the tourism industry in Vietnam. From there, the Toursim LCA connection becomes an objective trend to ensure the coexistence and development of both industries.

Assessing the development direction of the aviation industry in the coming time, combined with practical movements of the Asia Pacific region, through research, the following trends can be pointed out:

Firstly, the industry's profits have been continuously decreasing since 2010: 16 billion USD in 2010, 8.6 billion USD in 2011, and 3 billion USD in 2012. The reasons for the decline are:

The above decrease is due to: 1) World oil prices

The rising prices make the cost of

ingredient

accounting for 33% of the cost, reaching 207 billion USD; 2) The public debt crisis in the EU led to a recession in the EU economy, causing the European aviation industry to lose 1.1 billion USD, the demand for air travel decreased from 7% (2011) to 2.3% (2012); 3) In the face of economic difficulties, governments of countries increased taxes on air transport, especially the EU announced a tax on "CO2 emissions from aircraft".

ETS” also greatly affected the profits of the world aviation industry; and 4) Aviation accidents occurred continuously all over the world in the first half of 2014, most notably the disappearance of flight MH370 and the shooting down of flight MH17 in Ukraine by Malaysia Airlines also affected the Asian tourism market.

Second, however, the Asia Pacific aviation industry remains

considered to have the best growth, with 2011 profits reaching 3.7 billion USD, an increase of

4.6%. The above results are due to the explosive growth of LCA airlines. Ten years ago, LCA airlines only accounted for 4% of the Asian market share. Five years later, they accounted for about 9% and this figure increased to 20% in 2011. In which, the competitiveness of Jetstar Group and Air Asia increased rapidly, forcing traditional airlines to also participate in exploiting the LCAS market such as Singapore Airlines, Vietnam Airlines... Many traditional airlines that do not directly exploit this market also seek to separate a joint venture with LCA airlines from other countries to dominate the market.

LCAS like All Nippon Airways (Japan) or Thai Airways… The occupation

The most effective and largest market segment for LCA companies is the tourism market segment. In which, LCA companies directly link with travel agencies or resorts to increase and stabilize demand in order to increase profit volume.

Third, in the context of the explosion of the scientific and technological revolution, economic globalization and rapid integration of economies with different levels of development into a unified economic bloc, economic integration is the fastest and most effective way to help the economies of countries in a bloc to unify. In the LCA field, two basic linkages often take place: 1) Through the acquisition and merger of LCA companies in different countries into a large-scale LCA corporation for development. In which, the size of the number of vehicles, the number of aircraft put into operation and the number of employees as well as the expanded flight network are important means to occupy and exploit the LCAS market of the region to increase the market share of the companies.

Group. From

that increases competitiveness to

maintain and develop in conditions

economic crisis and high fuel prices; and 2) Linking LCA with Tourism. This linkage has special advantages in terms of: Increasing the competitiveness of the two key economic sectors of the country, both protecting the domestic aviation market share and effectively exploiting the international market thanks to the advantage of scale and expanding demand for both key sectors of the economy. Because LCA demand is a derivative demand of tourism demand in the value chain of a complete tourism product. This linkage trend has

emerged since the emergence of LCA firms in the Asia Pacific region.

Positive, but only spontaneous in all stages of constituting a complete tourism product. A similar situation is also taking place in the market.

socialist orientation

meaning in

Vietnam since

when Pacific Airlines

Airlines changed to LCA Jetstar Pacific Airline.

Fourth, the international LCA firms' attack on the markets of all national firms in the Asia Pacific region, including those of

Japan and South Korea, which are markets with the best air services but the most expensive prices in the region and the world, have changed travel needs, especially the travel needs of young people not only in the above countries, but also created a wave of tourism and exchange among the entire population in the region. Moreover, the liberalization of the sky and the opening of the air service market forced the civil aviation industry of all countries, including Japan and South Korea, to quickly establish their own LCA airlines. In Japan, LCA Peach took off in March, Air Asia Japan and Jetstar Japan also operated commercial flights in April 2012. In addition, thanks to the positivity of the generous middle class in Japan, many new airports in this country have been built, making airfares increasingly lower to a more reasonable level. Facing that trend, the governments of Asian countries have adjusted policies with many incentives to help newly established LCA airlines operate effectively. In particular, the policy of supporting the reduction of landing costs, parking, ground services and the construction of additional specialized terminals creates favorable conditions for LCA airlines to operate smoothly and reduce costs, thereby maintaining reasonable and stable low fares for tourists. In particular, the governments of Asian countries have created conditions to promote close and effective links between LCA Tourism, helping these two industries increase their competitiveness and develop more and more stably.

Fifth, the Asia Pacific region has favorable geo-economic conditions, which is also a factor promoting the rapid development of LCAS, thereby creating a material foundation for the development of Tourism LCA, because: 1) Asia is a country with many islands, the distance between the mainland and the islands is very large, forcing governments to build many secondary airports to create circulation in the economy; 2) Asia has 270 cities with a population of 1 million people but no airports, so the opportunity for developing airports and expanding the flight network is very large; and 3) If 5 years ago, airlines in the Asia Pacific region only had 3,800 aircraft, by 2012 this number had reached 5,600, the growth rate of LCAS is estimated from 18 billion USD to 23 billion USD, corresponding to 30% of the aviation service market share in 2014.

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