Airline competition redraws Vietnam’s aviation map

Last update 12:00 | 27/04/2017
VietNamNet Bridge – Vietnam Airlines continues to be a traditional airline which provides full-service flights, but it will cooperate with Jetstar Pacific to exploit the lower-end market. Vietjet Air targets a hybrid model between traditional and low-cost airlines.

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The domestic market shares held by Vietnam’s airlines

Vietnam Airlines, the nation’s flag air carrier, has been expanding air routes to the biggest finance centers in the world. Meanwhile, Jetstar Pacific, where Vietnam Airlines holds a 70 percent stake, has been trying to expand domestic flights and flights to the region.

While Vietnam Airlines had a ‘4-star airline’ message, Jetstar’s slogan is ‘gia re moi ngay’ (low prices every day).

Vietnam Airlines, the nation’s flag air carrier, has been expanding air routes to the biggest finance centers in the world. Meanwhile, Jetstar Pacific, where Vietnam Airlines holds a 70 percent stake, has been trying to expand domestic flights and flights to the region.

The airline states on its official website that if someone finds any other airline that offers ticket prices lower than Jetstar Pacific’s, the airline will sell tickets at 10 percent lower than airfares he finds.

While Vietnam Airlines and Jetstar Pacific join forces to exploit all the segments in the aviation market, Vietjet is targeting the model between low-cost and traditional airlines. The hybrid model has been applied in other parts of the world in recent years.

Is this a wise step taken by Vietjet Air? Nguyen Thi Phuong Thao, Vietjet’s CEO, at an event held in HCMC recently, said 20-30 percent of Vietjet’s passengers are those who fly for the first time.

However, the considerable domestic market share and good branding has helped Vietjet become more confident to expand to international air routes and jump into the high-end market.

“As for international air routes, we strive for new passengers who have never flown to Vietnam,” she said. “More than half of international air routes opened by Vietjet Air have not been exploited by any other airline.”

Vietjet Air is believed to have a low-price strategy, but only to attract passengers on less-crowded air routes, but it does not have to do this for crowded routes. It has stated that it won’t fly on ineffective routes. On some air routes, Pacific Airlines is the only service provider.

Vietjet Air has recently attracted public attention with its proposal to become the investor in a project expanding Tan Son Nhat Airport in HCMC.

Making investment in airports is a new business field for Vietjet Air. However, this step, in analysts’ eyes, shows that Vietjet is taking an important step in its plan to minimize operation costs in the future.

Vietjet Air has shown an increase in non-ticket revenue. The air carrier’s prospectus showed that the ancillary revenue in 2016 reached VND3.5 trillion, an increase of 46 percent over the year before.RELATED NEWS

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This entry was posted in Đường hàng không - Aviation and tagged , , , , by Trần Đình Hoành. Bookmark the permalink.

About Trần Đình Hoành

I am an attorney in the Washington DC area, with a Doctor of Law in the US, attended the master program at the National School of Administration of Việt Nam, and graduated from Sài Gòn University Law School. I aso studied philosophy at the School of Letters in Sài Gòn. I have worked as an anti-trust attorney for Federal Trade Commission and a litigator for a fortune-100 telecom company in Washington DC. I have taught law courses for legal professionals in Việt Nam and still counsel VN government agencies on legal matters. I have founded and managed businesses for me and my family, both law and non-law. I have published many articles on national newspapers and radio stations in Việt Nam. In 1989 I was one of the founding members of US-VN Trade Council, working to re-establish US-VN relationship. Since the early 90's, I have established and managed VNFORUM and VNBIZ forum on VN-related matters; these forums are the subject of a PhD thesis by Dr. Caroline Valverde at UC-Berkeley and her book Transnationalizing Viet Nam. I translate poetry and my translation of "A Request at Đồng Lộc Cemetery" is now engraved on a stone memorial at Đồng Lộc National Shrine in VN. I study and teach the Bible and Buddhism. In 2009 I founded and still manage on positive thinking and two other blogs on Buddhism. In 2015 a group of friends and I founded website CVD - Conversations on Vietnam Development ( I study the art of leadership with many friends who are religious, business and government leaders from many countries. In October 2011 Phu Nu Publishing House in Hanoi published my book "Positive Thinking to Change Your Life", in Vietnamese (TƯ DUY TÍCH CỰC Thay Đổi Cuộc Sống). In December 2013 Phu Nu Publishing House published my book "10 Core Values for Success". I practice Jiu Jitsu and Tai Chi for health, and play guitar as a hobby, usually accompanying my wife Trần Lê Túy Phượng, aka singer Linh Phượng.

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