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Ho Chi Minh City-based Jetstar Pacific is a Vietnamese low-cost carrier. Formerly known as Pacific Airlines, the airline was re-branded Jetstar Pacific after a 2007 corporate restructuring which saw Australian-based Qantas take a minority shareholding. Jetstar Pacific is now part of the Jetstar low-cost network which includes Jetstar Asia (Singapore) and Jetstar (Australia). Jetstar Pacific's fleet includes Boeing B737-400 and Airbus A320-200 aircraft which operates domestic services within Vietnam. Until Feb-2012 Jetstar Pacific was 27% held by Qantas with other shareholders including its largest shareholder, State Capital Investment Corporation (SCIC) and Saigon Tourist Holding Company. On 22-Feb-2012, Qantas announced that the SCIC majority investment had been transferred to Vietnam Airlines and that Qantas increased its shareholding to 30% - cementing an interesting partnership between a full service and low cost airline.
Location of Jetstar Pacific main hub (Ho Chi Minh City Tan Son Nhat Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Jetstar Pacific fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
128 total articles
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21 total articles
VietJet is pursuing further network expansion over the next few months as the carrier looks to cement its position as the leading low-cost carrier in the Vietnamese market. VietJet is adding three more domestic routes for a total of 14 and is also preparing to launch services to Seoul, which would be its second international destination after Bangkok.
VietJet overtook Jetstar Pacific as Vietnam’s largest LCC less than one year after its 25-Dec-2011 launch. By its second-year anniversary at the end of 2013 the carrier will account for over 25% of capacity in the domestic market and have a fleet of 10 A320s – on both counts double the size of Jetstar Pacific.
But Jetstar Pacific is finally preparing a response as the Jetstar Group affiliate plans to launch international services by the end of 2013 and pursue domestic expansion. Jetstar Pacific and its majority owner Vietnam Airlines have done little so far to try to combat VietJet’s rapid ascent. If VietJet continues to expand quickly a response is inevitable although VietJet could try to avoid a potential conflict by focusing more on expanding planned joint ventures in other Asian markets.
VietJet Air is planning to add three new domestic and three new international routes in the coming months as Vietnam’s leading low-cost carrier continues to pursue rapid expansion. VietJet has already surpassed rival LCC Jetstar Pacific to become Vietnam’s second largest carrier after Vietnam Airlines with approximately a 15% share of the country’s fast-growing domestic market. The privately-owned carrier will see its share of capacity in Vietnam’s domestic market approach 20% by mid-2013 – an impressive achievement given it only launched services in Dec-2011.
VietJet now operates 10 routes, including one international route, with a fleet of six A320s. It plans to operate by the end of 2013 a fleet of 10 A320s on 16 routes – 12 domestic and four international.
Vietnam’s largest low-cost carrier, VietJet Air, is preparing to quickly expand its international network, taking advantage of growing demand for budget travel to and from Vietnam. The carrier launched its first international route on 10-Feb-2013, Ho Chi Minh-Bangkok, and is looking at several additional potential international destinations in Southeast and North Asia.
Two more international routes as well as additional capacity domestically, where VietJet already has captured a 15% share of the market, are expected in 2013. Vietnam is poised for further LCC domestic and international growth as LCC penetration rates in the country’s domestic and international markets are the lowest among major Southeast Asian countries. VietJet is well positioned, along with a rejuvenated but still very small Jetstar Pacific, to cash in on Vietnam’s LCC boom.
VietJet Air has announced a major network expansion that will make it Vietnam’s largest low-cost carrier, overtaking Jetstar Pacific, by the end of 2012. VietJet is also poised to beat 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/Dec-2012, is looking at launching its first international route – possibly Ho Chi Minh-Bangkok – in late 2012 or early 2013.
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 carrier began a more promising new chapter earlier this year after a 70% stake was transferred to Vietnam Airlines, which previously 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.
VietJet Air, an LCC that launched operations in Vietnam in Dec-2011, is expanding its schedule and in May-2012 will capture an estimated 9% of the domestic market. The growth honeymoon however will soon slow down and become competitive as Jetstar Pacific, now the LCC of Vietnam Airlines, plans to expand its fleet later this year. Jetstar Pacific currently only operates five Boeing 737-400s and two Airbus A320s but will expand to an all-A320 fleet of 15 within a "few" years, possibly placing it on par with the 15 aircraft VietJet plans to have by the end of 2014.
VietJet will use some of its A320s on international routes, possibly starting late this year, but aims to capture about 20% of the domestic Vietnamese market. VietJet currently has a fleet of three A320s although its current schedule – three roundtrips between Hanoi and Ho Chi Minh – could easily be operated with just one aircraft. VietJet's additional routes will fully or nearly fully utilise its current available capacity, allowing it to increase its market share from 3% to 9%.
The nascent and, at times, challenging Vietnamese market will undergo a positive structural shift following Vietnam Airlines taking over a majority 70% shareholding in Jetstar Pacific, the Qantas Group’s Ho Chi Minh-based low-cost subsidiary. Qantas at the same time is increasing its share in the carrier, which was previously majority owned by the Vietnamese State Capital Investment Corporation (SCIC), from 27% to 30%. Jetstar Pacific is expected to become Vietnam Airlines’ only LCC brand/subsidiary, replicating in Vietnam the Qantas-Jetstar dual brand strategy pioneered in Australia and the new dual brand strategy at Japan Airlines – which also has turned to Jetstar to launch an LCC brand/subsidiary.
Vietnam Airlines had been planning to launch its own LCC in 2014, but is now expected to instead piggyback on the established LCC Jetstar Pacific and be able to grow its presence in the budget sector in a faster time frame. The Qantas Group will contribute AUD7.5 million (USD8 million) as part of a wider AUD25 million (USD26.7 million) capital injection at Jetstar Pacific. The capital will be used in part to accelerate Jetstar Pacific’s long-delayed fleet renewal programme. The carrier's four remaining ageing Boeing 737-400s will finally be replaced with A320s this year and its A320 fleet, which now stands at only two aircraft, is expected to grow to 15 aircraft within the next few years.
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