Vietnam's Vietjet Air Takes Off in Public Listing

Vietnam's Vietjet Air Takes Off in Public Listing
Vietjet Air © Asia 361

Vietnam's low-cost carrier Vietjet has soared the maximum 20% in its trading debut in Ho Chi Minh City.

The country's first private airline is thought to soon overtake flag carrier Vietnam Airlines in market share.

Investor interest is driven by the growth pace in the domestic airline market, one of the fastest in Asia.

Vietnam has over the past years been slowly opening up to international investment.

VietJet currently operates about 60 routes both domestically and internationally, and hopes to have a fleet of 200 aircraft by 2023.

The budget airline is another story of a booming Asian low-cost carrier managing to clock exceptional growth in its first years since taking to the sky.

Inside Vietjet. Image: Reuters
Inside Vietjet. Image: Reuters

The airline launched its first commercial flights only in December 2011 but, thanks to a rapidly growing middle class, has jumped to become the country's second-largest airline, almost head to head with flag carrier Vietnam Airlines.

Both carriers have about 40% of market share. But if Vietjet's past growth is anything to go by, it is set to claim the top spot in no time.

While most analysts agree that the domestic market will continue to show strong growth, there is caution over whether Vietjet will be able to replicate that success abroad.

"There's no doubt that they are the dominant low-cost carrier in Vietnam," explains aviation analyst Greg Waldron of FlightGlobal. "The question is whether they can really expand that model overseas."


Vietjet Air. Image: Reuters
Vietjet Air. Image: Reuters

"These business models are not like McDonald's, where you can just replicate the model elsewhere," he explains.

"With airlines, it's a lot more challenging: if they go internationally, this would add a huge amount of complexity to their business model. Long-haul flights would again be a completely different game."

Source : BBC

Indah Gilang Pusparani

Indah is a researcher at Badan Perencanaan Pembangunan Penelitian dan Pengembangan Daerah Kota Cirebon (Regional Development Planning and Research Agency of Cirebon Municipality). She covers More international relations, tourism, and startups in Southeast Asia region and beyond. Indah graduated from MSc Development Administration and Planning from University College London, United Kingdom in 2015. She finished bachelor degree from International Relations from University of Indonesia in 2014, with two exchange programs in Political Science at National University of Singapore and New Media in Journalism at Ball State University, USA. She was awarded Diplomacy Award at Harvard World Model United Nations and named as Indonesian Gifted Researcher by Australian National University. She is Researcher at Regional Planning Board in Cirebon, West Java. She previously worked as Editor in Bening Communication, the Commonwealth Parliament Association UK, and diplomacy consulting firm Best Delegate LLC in USA. Less
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