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- 200 Nguyen Son Str.,
Long Bien Dist.,
Ha Noi city,
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- Ho Chi Minh City Tan Son Nhat Airport
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Based in Hanoi, Vietnam Airlines is the national airline of Vietnam and wholly-owned by the Vietnamese government. Utilising a fleet of narrow and wide-body Airbus, Boeing, and ATR aircraft, Vietnam Airlines operates an extensive network of domestic and regional services within Southeast and North Asia and international services to Europe and Australia. Vietnam Airlines joined the SkyTeam alliance in 2010.
Location of Vietnam Airlines main hub (Ho Chi Minh City Tan Son Nhat Airport)
736 total articles
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VietJet Air and Jetstar Pacific are planning more international expansion in 2015 as both Vietnamese LCCs continue to rapidly expand their fleets. VietJet is looking at Indonesia, Malaysia, Japan and Russia while Jetstar Pacific will focus on North Asia.
VietJet has expanded rapidly since its Dec-2011 launch and is now about double the size of Jetstar Pacific. VietJet is poised to complete two major milestones in Nov-2014 as the carrier takes the first of at least 63 A320 family aircraft that were ordered in early 2014 and launches its first overseas joint venture, Thai VietJet Air.
Jetstar Pacific meanwhile is accelerating the pace of its expansion as it adds three A320s in 4Q2014 and at least two more aircraft in 2015. Jetstar Pacific also completed a milestone on 27-Oct-2014, when it launched its first scheduled international route – Ho Chi Minh to Singapore.
VietJet Air is planning further expansion of its international network with Cambodia and Russia slated to become its fourth and fifth overseas markets. Vietnam’s leading low-cost carrier is also looking at launching a connection product which will enable it to compete in the broader Russia-Southeast Asia and North Asia-Southeast Asia markets.
Russia will initially be served using VietJet’s rapidly growing A320 fleet to access the Russian Far East city of Vladivostok. But VietJet has big ambitions for the Russian market using its anticipated future fleet of A330s.
The LCC sees huge potential in Russia as it is a large and fast growing source market for Vietnam’s emerging tourism industry. VietJet’s parent company also has Russian roots, which should make it easier from an access and local sales perspective.
Vietnam’s two low-cost carriers, Jetstar Pacific and VietJet Air, are slowly starting to penetrate Vietnam’s international market. On 24-Jul-2014 VietJet launched Seoul as its third international destination while Jetstar Pacific is launching services in Oct-2014 to Singapore, which will become its second international destination.
VietJet and Jetstar Pacific have until now focused on the domestic market, driving up Vietnam’s domestic LCC penetration rate to nearly 40%. Vietnam’s international market in comparison has an LCC penetration rate of only about 14%, with foreign LCCs accounting for almost all of the capacity. This contrasts with the overall Southeast Asian LCC penetration level of over 40% including about 60% on routes within the region.
VietJet’s new Hanoi-Seoul service is only the second LCC route linking Vietnam with North Asia. Ho Chi Minh-Singapore is Vietnam’s largest international route and the entrance of Jetstar Pacific indicates a potential strategic shift at parent Vietnam Airlines, which until now has been reluctant to use its LCC brand on international routes it already serves with its full-service product.
Phu Quoc in southwest Vietnam continues to see a surge in capacity as the island emerges as a popular tourist destination. Phu Quoc now has Vietnam’s fifth largest airport, having risen four places since a new airport opened in late 2012.
Phu Quoc seat capacity has more than doubled over the past two years, driven by the launch of services from Vietnam’s two LCCs, VietJet Air and Jetstar Pacific, and expansion from flag carrier Vietnam Airlines. Phu Quoc is poised for further rapid growth in 4Q2014 as it becomes the sixth Vietnamese airport with international services, as Vietnam Airlines launches flights to Singapore and Cambodia’s Siem Reap.
Phu Quoc International Airport is well placed to attract more new services, including potentially scheduled flights from foreign carriers. It is already served by a limited number of international charter services.
Jetstar Pacific is resuming expansion as the Vietnamese low-cost carrier enters the international market and grows its A320 fleet. The expansion will see the low profile Jetstar Group affiliate/Vietnam Airlines subsidiary raise its profile and take on its younger and now bigger rival, VietJet Air.
Jetstar Pacific launched services to Macau on 28-Mar-2014, the carrier’s first international destination since it adopted the Jetstar brand in 2008. Jetstar Pacific has largely languished over the last six years, growing its fleet by a paltry one aircraft as other LCCs in the region – including VietJet – have raced past.
The planned expansion of its network and fleet, starting with Macau and the delivery of a sixth A320, will usher in a new era for Jetstar Pacific. There are still opportunities for Jetstar Pacific as Vietnam remains a relatively under-penetrated market. But Jetstar Pacific faces challenges and a potential risk that its expansion could become a case of too little too late.
Vietnam Airlines plans to resume long-haul expansion in 2015, ending a hiatus of over two years caused by delays in the 787 and A350 programmes. Vietnam Airlines now expects to begin taking 787-9s and A350-900s in 2Q2015 with eight deliveries slated for 2015 including four growth aircraft.
The government-owned flag carrier has been focusing in recent years on short-haul and medium-haul expansion using its A321 fleet. Long-haul expansion is now becoming critical for Vietnam Airlines to raise its global profile and head off Vietnam’s second largest carrier VietJet Air, a fast-expanding LCC which is also now planning to expand internationally into long-haul markets.
Intensifying competition clouds Vietnam Airlines’ prospects as it plans for an initial public offering (IPO) in mid-2014. The Vietnamese market has huge growth potential but with LCCs and foreign full service carriers becoming more intrusive, Vietnam Airlines has challenges to overcome as it starts to accelerate expansion.