Vietnam domestic market: growth slows as Vietnam Airlines regains market share from VietJet Air

Domestic traffic growth in Vietnam has slowed to less than 10% in 2017, following four consecutive years of high double-digit gains. The Vietnamese domestic market was one of the fastest-growing domestic markets in the world from 2012 to 2016, but is expected to grow at a more modest rate of 10% to 15% per annum over the next few years.

Vietnam Airlines has regained domestic market share in 2017 by growing faster than the overall market, for the first time since the launch of VietJet in late 2011. Vietnam Airlines should capture a 43% to 44% share in 2017, compared to 42% in 2016.

Vietnam's two low cost airlines, Jetstar Pacific and VietJet, have focused expansion almost entirely on the international market in 2017. VietJet matched Vietnam Airlines' 42% share in 2016, but in 2017 has ceded domestic market share, failing to meet its objective of reaching 50% domestic market share.