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Vietnam’s Ministry of Transportation has recently approved a restructuring plan to help the aviation sector grow through the expansion of domestic aircraft from now until 2020.
Vietnam Airlines (owned by the Vietnamese government), Vietnam Air Services Company (a subsidiary of Vietnam Airlines), JetStar Pacific (also a subsidiary of Vietnam Airlines), and VietJetAir (privately owned) currently operate a total of 145 airplanes. This number is expected to grow from 190 to 210 aircraft in 2020.
Vietnam Airlines plans to add new aircraft to its fleet, which will consist of modern models including Boeing B777s and B787-9s, and Airbus A330s and A350s. It’s aiming for a 39.9% of the international market share and 49.9% of the domestic share by 2018.
VietJetAir is currently the only privately owned airline and the second biggest carrier in the country. It has recently purchased and leased 100 aircraft from European airbus makers and partners.
JetStar Pacific is also aggressively growing its fleet with 3-4 new models being released annually in the next few years.
In the restructuring plan, the Ministry indicated it wants a bigger share of the domestic air transportation sector at a rate of 3.23% per passenger and 0.04% for cargo transport. It plans to increase international passenger commission shares to 45.9% in 2020. The plan also details the equitization of enterprises in the sector, ways to increase market share of low-cost carriers, as well as methods of cutting operation costs and improving the performance of airlines.
The air transportation industry in Vietnam is experiencing a rapid growth with all three major companies posting substantial profit in the 1st quarter of 2015. With expected increased domestic flight competition, the Ministry expects low-cost carriers to compete fairly with their regional counterparts in terms of service quality.