VietJet pursues more domestic expansion and plans Seoul as second international destination

VietJet is pursuing further network expansion over the next few months as the carrier looks to cement its position as the leading low-cost carrier in the Vietnamese market. VietJet is adding three more domestic routes for a total of 14 and is also preparing to launch services to Seoul, which would be its second international destination after Bangkok.

VietJet overtook Jetstar Pacific as Vietnam’s largest LCC less than one year after its 25-Dec-2011 launch. By its second-year anniversary at the end of 2013 the carrier will account for over 25% of capacity in the domestic market and have a fleet of 10 A320s – on both counts double the size of Jetstar Pacific.

But Jetstar Pacific is finally preparing a response as the Jetstar Group affiliate plans to launch international services by the end of 2013 and pursue domestic expansion. Jetstar Pacific and its majority owner Vietnam Airlines have done little so far to try to combat VietJet’s rapid ascent. If VietJet continues to expand quickly a response is inevitable although VietJet could try to avoid a potential conflict by focusing more on expanding planned joint ventures in other Asian markets.

VietJet will also launch service from Hanoi to Hue on 15-Oct-2013 with one daily flight, according to the carrier’s booking engine. VietJet previously only served Hue, located in north-central Vietnam, from Ho Chi Minh. All services at Hue have been suspended since 20-Mar-2013, when the airport closed for runway repairs. The airport is now slated to re-open on 20-Sep-2013 with VietJet initially resuming the Ho Chi Minh-Hue route with two daily flights, representing a doubling of its previous Ho Chi-Minh-Hue schedule.

In a recent interview with Bloomberg that has been re-published by VietJet on its website, VietJet managing director Luu Duc Khanh said the carrier is now looking to form similar joint ventures in other Asian markets. He added VietJet is moving forward with plans for a second joint venture agreement that would be signed in 2014 and involve one of four North Asian markets – China, Japan, South Korea and Taiwan.

Mr Khanh also said in the interview that VietJet plans to launch flights from Hanoi to Seoul in 4Q2013. VietJet’s original network plan for 2013 included four international routes – Ho Chi Minh to Bangkok, Singapore and Taipei, and Hanoi to Bangkok. But Singapore, which originally was expected to be launched in Jun-2013, and Taipei have been put on hold while Seoul Incheon has been brought forward.