Vietnam's Long Thanh International Airport will be constructed in the southern province of Dong Nai (Thanh Nien News, 13-Aug-2011). Vietnam Government reportedly plans to issue bonds, gain development assistance funding and seek private investment to raise funds to construct the airport( Reuters/Thanh Nien News/Vietnam News Agency, 13-Aug-2011). Construction will commence in 2015 with an initial investment of approximately USD6.75 billion. The first phase is scheduled for completion in 2020 with capacity to handle 25 million passengers p/a by 2020 and the airport will be able to accommodate A380 aircraft. Its capacity will reach 100 million passengers and five million tons of goods p/a by 2035. The airport is located 43 kms northeast of Ho Chi Minh City.
New airport near Ho Chi Minh City to commence construction in 2015; private investment to be sought
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The Vietnamese LCC turns five years old in Dec-2016 and is approaching a critical juncture as it starts to pursue faster international expansion and prepares for an initial public offering (IPO). VietJet has been very successful in the Vietnamese domestic market, driving rapid growth and quickly capturing a 40% share.
With international expansion come higher risks and more challenges. VietJet is betting it can succeed internationally after placing orders for another 120 aircraft in recent months, raising its order book to 200.
Thai VietJet Air Part 2: international expansion will be challenging for VietJet’s new JV
Thai VietJet Air has launched scheduled services with two domestic routes and flights to neighbouring Vietnam, the home market of its parent. The start-up, which is 49% owned by the VietJet Group, is considering the addition of several domestic and international routes in the coming months as it is allocated more A320s from VietJet’s 200 aircraft-strong order book.
However both domestic and international expansion will be challenging, given the already intense competition in Thailand’s short haul LCC sector. Virtually every market Thai VietJet is evaluating is already served by more established LCCs, and /or is also being targeted by other Thai LCCs.
This is the second half of an analysis report on Thai VietJet Air’s launch of scheduled services and outlook. The first part focused on the new LCC’s prospects in the domestic market. This part examines opportunities for Thai VietJet in Thailand’s international market.