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Thai VietJet Air will start small with an international focus. Domestic expansion could be painful

Analysis

Competition in Thailand will intensify further in Mar-2015 when Thai VietJet Air begins scheduled services. The new joint venture carrier will become the fourth LCC in a crowded domestic market that grew almost 20% in 2014.

But the Vietnam-based VietJet Group is pursuing a relatively conservative strategy for the Thai market. Thai VietJet plans to only operate three A320s in its first year and mainly serve international routes.

Avoiding highly competitive routes would be a wise policy as Thailand already faces overcapacity and it will take time for the VietJet brand to gain traction. Thai VietJet could become more of a niche player in selected lucrative growth markets such as Thailand-China rather than a significant competitor in Thailand's dynamic LCC sector.

This is Part 2 of a two-part series of analysis reports on the VietJet Group.

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