VietJet Air

VietJet to pursue more rapid expansion in 2013; Jetstar Pacific needs to respond – fast

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.

VietJet starts to exploit huge potential of Vietnam’s international low-cost airline market

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.

Ethiopian Airlines extends its Asian reach and links South America with China

Ethiopian Airlines plans to expand its Asian network with the addition of Ho Chi Minh City, Manila and Seoul Incheon from 18-Jun-2013. Hong Kong will also become a direct route from Addis Ababa, rather than operating via Bangkok. But those plans could come unstuck if the grounded 787 fleet is not cleared to return to service by then.

Ethiopian intends to operate Ho Chi Minh, Manila and Seoul Incheon via its two existing Asian hubs, Hong Kong and Bangkok. Seoul and Manila will be an extension of the new direct Addis Ababa-Hong Kong route and Ho Chi Minh is added to the Addis Ababa-Bangkok service. Recently added Kuala Lumpur via Bangkok will be expanded with a fourth frequency from 24-Jun-2013.

Ho Chi Minh and Manila will be served three times weekly while Seoul will have four weekly frequencies. All routes will be operated using Boeing 767-300ER aircraft according to the 12-Feb-2013 GDS timetable and inventory display.

Why AirAsia doesn’t need a new affiliate in Singapore, the rest of ASEAN and potentially all of Asia

The AirAsia Group has started focusing on growth at its existing portfolio of carriers after determining there is no need for additional affiliates in ASEAN and potentially in the rest of Asia. After spending the last several years actively searching for new joint venture partners, AirAsia has realised that most Asian markets where it does not yet have a local affiliate can be sufficiently covered by its existing carriers. The only possible short-term exception is India, but AirAsia remains wary of entering the Indian market and India has been the only Asian market where the group has reduced capacity over the last year.

Asia’s leading low-cost carrier group will spend most of 2013 growing domestically in its five home markets and expanding international services to some strategic non-home markets, particularly mainland China. But expansion in AirAsia’s largest non-home market, Singapore, will be slowed significantly. Congestion in Singapore – more so than the saturation of Singapore’s LCC market – is prompting AirAsia to focus more on other non-home markets.

Phu Quoc sees surge of new flights, led by VietJet and Vietnam Airlines, as new airport opens

Phu Quoc Island in southwest Vietnam has seen a 60% surge in seat capacity since the opening of a new airport in Dec-2012. More growth is expected over the medium-term as Phu Quoc, which Vietnam is keen to develop into a major tourism destination, looks to attract international services. For now Phu Quoc handles domestic services from three carriers, including Vietjet, which became the first LCC to serve the market on 15-Dec-2012.

Phu Quoc’s new airport is designated for international services and can handle widebody aircraft, replacing an older facility which could only accommodate regional aircraft. If it succeeds in attracting international services, Phu Quoc would become Vietnam’s fourth airport with international services. It has already grown to become the country’s seventh largest domestic airport, jumping two places over the last month, and could become the fourth largest domestic airport if capacity grows by just another 20%.

Flights from the Phu Quoc’s old airport, which was served by Vietnam Airlines ATR-72s and Air Mekong Bombardier CRJ900s, moved over to the new facility on 01-Dec-2012. The formal opening of Phu Quoc International Airport took place on 15-Dec with a ceremony attended by Vietnamese Prime Minister Nguyen Tan Dung.

VietJet overtakes Jetstar Pacific as largest Vietnamese low-cost carrier

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.