AirAsia announced (31-May-2010), subsequent to a previous statement by the carrier, the financial due diligence on VietJet Aviation Joint Stock Company has been completed. An application is being made to the Civil Aviation Authority of Vietnam (CAAV) for an Air Operator's Certificate that will permit the operation of an LCC in Vietnam, based on the business model of AirAsia in other ASEAN countries. [more]
AirAsia applies for operating certificate for VietJet Aviation Joint Stock Company
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The AirAsia Group has forged a new joint venture in Vietnam, marking its third attempt to establish a Vietnamese affiliate. AirAsia was initially partnered with VietJet Air but the partnership was dissolved prior to VietJet commencing operations in late 2011.
The market has since more than doubled in size, and Vietnam has emerged as Southeast Asia’s fastest growing market. While there is further growth potential, the LCC incumbents VietJet and Jetstar Pacific have first mover advantage, and infrastructure constraints could make it difficult for any new entrant to establish a significant presence. AirAsia will also need to overcome regulatory hurdles.
Vietnam is the second largest market in Southeast Asia without an AirAsia affiliate - after Singapore, where the group has been able to develop a sizeable presence with a virtual hub. Vietnam is a market AirAsia strategically cannot avoid, but the group is late to the party and faces some of the same obstacles that have impacted its performance in the Philippines.