Vietnam: A new Asian Tiger?

Ten years ago, Vietnam was hailed as the next great Asian tiger. The Communist Party had opened its doors to the outside world and it looked like the biggest investment opportunity since China.

Global names like Unilever, Shell and Mitsubishi piled in, swanky hotels went up and economic growth hit 10% - quite something for a country then ranked among the poorest in the Third World.

Vietnam's lures include oil deposits and mineral and agricultural resources, but its biggest attraction is its huge labour force. The population of 76 million, the second largest in south-east Asia, is well educated - the literacy rate is 88% - hard working and very cheap, even by Asian standards.

Firms from South Korea, Taiwan, Hong Kong and Japan were quick to set up garment and toy factories and build 'investment zones'.

Continental opens sales offices in Vietnam

Continental Airlines, the world's seventh largest carrier, opened its first sales office in Vietnam ahead of an expected formal code-share agreement with Vietnam Airlines.

Continental announced Wednesday that Traveland Joint Stock Company formally begun to act as its sales agent. The American carrier said it wanted to tap the growing numbers of ethnic Vietnamese traveling to and from the United States.

"The U.S. is a huge market with more than one million former Vietnamese residing in the United States and overseas Vietnamese have begun traveling back to their homeland," it said in a statement. In 2002, 280,000 passengers traveled between the United States and Vietnam, 75% of whom were Vietnamese-Americans, according to Vietnam Airlines.

The start of Continental's sales operations here follows January's signing of a landmark U.S.-Vietnam aviation agreement that allows direct flights between the two countries for the first time since the Vietnam War ended in 1975.

Although the five-year pact only permits two U.S. passenger airlines to fly to Vietnam for the first two years, there are no limits on the number of American carriers operating code-share arrangements with non-U.S. airlines.

Continental has more than 2,200 daily departures to 127 domestic and 96 international destinations, with major hubs in Houston, Cleveland and Guam. Its U.S. rivals United Airlines and American Airlines already have a presence in Vietnam.

American Airlines, the world's largest carrier, opened its offices last month and it is the only U.S. carrier to have so far lodged an application with the U.S. government to begin code share flights with Vietnam Airlines.

Continental and United were also expected to apply. However, the U.S. carriers cannot put their flag on Vietnam Airlines aircraft until the FAA has conducted a safety inspection of Vietnam's aviation operations. This could start within a few months

For the moment, American carriers can offer services through a third airline that runs flights on behalf of Vietnam Airlines in its own code share deal.

The formal commencement of air links will be another significant step in the full normalization of relations between Washington and Hanoi, who only established diplomatic ties in 1995, two decades after the war ended.