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VietJet Air SWOT: rapid success and growth in booming Vietnam, but future challenges

Analysis

VietJet has quickly built up a significant position in one of the fastest growing aviation markets and emerged as one of the leading low cost airline groups in Southeast Asia. VietJet launched operations in Vietnam at the end of 2011 and has already become Vietnam's largest domestic airline.

VietJet captured a 42% share of the Vietnamese domestic market in 2016 and a 27% share of the total market. The airline has also been consistently profitable since 2013.

However, a large proportion of VietJet's profits have been generated from sale leasebacks. VietJet has also enjoyed low maintenance costs as a result of operating a new fleet. VietJet could face higher aircraft rental and maintenance costs in future, and will also have to overcome stiff competition as it starts to focus more on expanding in the international market, which is necessary for the group to absorb its nearly 200 aircraft order book.

In this SWOT, CAPA examines the Vietnam-based airline group's strengths, weaknesses, opportunities and threats.

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