Low-cost Vietnamese carrier Vietjet soared by as much as 20% in its business debut in Ho Chi Minh City.
The country’s first private airline is believed to soon overtake flag carrier Vietnam Airlines by way of market share.
Investor interest is fueled by the expansion rate of the domestic airline market, certainly one of the fastest in Asia.
Vietnam has been slowly opening as much as international investment in recent times.
VietJet currently serves around 60 routes domestically and abroad and hopes to have a fleet of 200 aircraft by 2023.
The low-cost airline is one other story of a dynamically developing Asian low-cost carrier that managed to realize exceptional growth in the primary years after taking to the air.
The airline only launched its first business flights in December 2011, but due to a rapidly growing middle class, it quickly became the country’s second-largest airline, almost neck and neck with flag carrier Vietnam Airlines.
Both carriers have roughly 40% market share. However, if Vietjet’s development thus far is anything to go by, it’ll soon take the highest spot.
While most analysts agree that the domestic market will proceed to point out strong growth, there are doubts whether Vietjet will give you the option to duplicate this success abroad.
“There is no doubt that it is the dominant low-cost carrier in Vietnam,” explains aviation analyst Greg Waldron of FlightGlobal. “The question is whether they can really expand this model overseas.”
“These business models are not like McDonald’s, where you can just replicate the model elsewhere,” he explains.
“For airlines it is much more difficult: international flights would significantly complicate their business model. Long-haul flights would be a completely different game again.”
Source: BBC
