VietJet to Be First Private Vietnam Carrier With Foreign Route

VietJet Aviation Joint-Stock Co. is set to begin flights to Bangkok in December, becoming the first privately owned Vietnamese carrier to fly abroad.

The airline will operate a daily service from its Ho Chi Minh City hub, which will eventually rise to twice a day, Pritam Singh, its vice president for business development, said in an Oct. 12 interview in the Vietnamese city. The carrier intends to fly across Southeast Asia by the end of 2015, when it expects to have 20 planes, he said.

VietJet began flying less than a year ago as the government moved away from protecting state-owned Vietnam Airlines Corp. and allowing more competition. Emirates also started flights to Ho Chi Minh City this year, and Etihad Airways PJSC and Air Astana have announced plans to begin services, drawn by rising tourism and an economy that is set to grow 5 percent this year.

The new route “is symbolically important,” said Peter Harbison, the Sydney-based executive chairman of CAPA Centre for Aviation. “There’s always been a conservative approach to regulation in Vietnam.”

VietJet is set to surpass Jetstar Pacific Airlines Joint- Stock Aviation Co. as Vietnam’s second-biggest carrier on domestic routes, according to CAPA. The airline may operate as many as nine domestic routes by the end of year, which would give it a 16 percent share of capacity, the research company said in an Oct. 8 note.

Jetstar Pacific will have 13 percent and Vietnam Air 68 percent, it said. Jetstar Pacific is controlled by Vietnam Air, and Qantas Airways Ltd. (QAN) has a minority stake.

VietJet this month took delivery of its fourth leased Airbus SAS A320. The airline plans to have 20 leased A320s by 2015, Singh said.

The carrier also eventually plans to fly beyond Southeast Asia to markets such as Taiwan, South Korea, Japan, and, possibly, smaller cities in China, Singh said. The airline is a unit of Hanoi-based Sovico Holdings, which also controls Ho Chi Minh City Housing Development Commercial Joint-Stock Bank, known as HD Bank.

Foreign arrivals to Vietnam rose 13 percent in the first nine months of the year to 4.85 million, according to the General Statistics Office in Hanoi.

--Jason Folkmanis in Ho Chi Minh City. Editors: Neil Denslow, Garry Smith

To contact Bloomberg News staff for this story: Jason Folkmanis in Ho Chi Minh City at folkmanis@bloomberg.net;

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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