Vietnam Budget Carrier Expands Network

Manila Bulletin
October 24, 2012 Wednesday


VietJet Air is aggressively expanding its major network is a bid to make it Vietnam's largest low-cost carrier, overtaking JetStar Pacific by the end of 2012.

The center for Asia Aviation (CAPA) said that VietJet is also set to overtake rival JetStar Pacific in becoming the first Vietnamese LCC to operate international services.

VietJet, which will expand its domestic network from five to nine destinations in Nov 2012, is looking at launching its first international route- possibly Ho Chin Minh-Bangkok in early 2013.

CAPA noted that JetStar Pacific has been focusing this year on fleet renewal rather than expansion but is planning to resume expansion in 2013, ending a hiatus of four years in which growth was paused due partially to internal uncertainty.

The airline started a more promising new chapter earlier this year after a 70% stake was transfered to Vietnam Airlines which previuosly had been looking at launching its own LCC subsidiary. JetStar owns the remaining 30% stake in JetStar Pacific.

But JetStar Pacific may struggle to keep up with much newer VietJet, which is likely to continue expanding at a faster pace than JetStar Pacific, said CAPA.

VietJet launched services in late Dec. 2011 but has expanded quickly and by its first year anniversary will operate 22 daily round-trip frequencies on nine domestic routes. It currently operates five domestic routes and an average of 10 daily frequencies.

CAPA said the carrier is adding capacity on four of its routes on 16 Oct. 2012, at which point it will operate 16 daily frequencies.

VietJet earlier announced plans to add another four routes in Nov. 2012 and Dec. 2012 - Ho Chi Minh to Hue, Phu Qouc and Vinh and Hanoi to Dalat- and expand its total number of daily frequencies to 22.

CAPA noted that JetStar Pacific had a big head start, becoming Vietnam's first LCC in 2007, when the carrier formerly know as Pacific Airlines was rebranded and adopted the low-cost model following investment from JetStar.

But JetStar Pacific currently only operates four domestic routes and 15 daily roundtrip frequencies , based on schedules on JetStar's website. The airline for now is only planning to add two frequencies for the remainder of this year, giving the LCC five domestic routes and 17 daily roundtrips.

JetStar Pacific currently accounts for about 14% of capacity in Vietnam's domestic market while VietJet accounts for 9%.(EHL)