VietJet Air is looking to launch JVs in Myanmar, Cambodia and Laos following the signing of a MoU with Kan Air to establish Thai VietJet, according to Managing Director Luu Duc Khanh. As reported by Bangkok Post, the subsidiaries will be established "using Thai VietJet Air's 49:51 model" of ownership with a Myanmar subsidiary expected to be the carrier's next joint venture. Mr Khanh stated VietJet Air aims to increase its A320 fleet from eight to 20 aircraft in 2014 to accommodate subsidiary carriers.
VietJet Air looking to launch joint ventures in Myanmar, Cambodia and Laos
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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.
Southeast Asia-US market Part 3: new nonstops need to overcome stiff one-stop FSC & LCC competition
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Southeast Asian airlines currently account for less than a 20% share of the total Southeast Asia-US market. Philippine Airlines and Singapore Airlines are the only significant players in this market and are aiming to increase their share as they add new nonstop routes. Garuda Indonesia, Thai Airways and Vietnam Airlines are also keen to become significant players as they launch flights to the US, replacing their now limited offline products.
However, market share gains will likely come at the expense of yields and profitability as competition with North Asian airlines – and to some extent US and Gulf carriers – intensifies. North Asian airlines now account for more than 50% of bookings in the Southeast Asia-US market and have increased their reliance on Southeast Asian connections as they have added US capacity, resulting in very competitive fares.