Vietnam Airlines is preparing to launch a low-cost carrier subsidiary or unit by 2014. CAPA has been told Vietnam Airlines intends to use the second brand in the domestic and international markets. Domestically the flag carrier faces the prospect of increased competition from Jetstar Pacific and AirAsia’s new Vietnamese affiliate, VietJet Air. Internationally, Vietnam Airlines’ new budget brand will focus primarily on the China market. The Vietnam-China market is now relatively underserved and Vietnam Airlines believes a budget product is needed to unlock its tremendous growth potential and meet growing outbound tourism demand from several Chinese cities. Vietnam Airlines would be the last of Southeast Asia’s six major flag carriers to establish a separate budget brand as Garuda Indonesia, Malaysia Airlines, Philippine Airlines, Singapore Airlines and Thai Airways International all currently have or will soon have LCC subsidiaries or units. [more-CAPA report]
Vietnam Airlines plans second budget brand by 2014
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