VietJet Air 2016 outlook: overtakes Vietnam Airlines in domestic market as IPO planned for 1H2016

With an IPO expected in 1H2016, Vietnamese privately owned low cost carrier VietJet Air is planning more rapid expansion for 2016. This will result in further domestic market share gains and a larger international network. VietJet has quickly captured a 40% share of Vietnam's domestic market, and will likely surpass Vietnam Airlines in 2016 as Vietnam's largest domestic carrier.

International expansion has been modest in VietJet's initial four years, as the LCC has recognised that there are bigger and less risky opportunities domestically. Nevertheless, VietJet will continue to build up its international operation gradually in 2016, including the Feb-2016 launch of Hanoi-Taipei, which will become its eighth scheduled international route.

Faster international expansion is expected in the medium to long term, possibly using widebody aircraft, as the domestic market will eventually become saturated. A new reservation system that VietJet plans to decide on in 2016 will enable the LCC to start pursuing transit traffic, providing an important new source of international traffic as VietJet steps up marketing activities overseas.