VietNamNet Bridge – While observers believe that budget airlines cannot make profit in the current difficult conditions, some Vietnamese budget airlines have reported profits and plans to expand their fleets.

Vietjet Air has reported the profit of VND120 billion after two years of operation. The budget air carrier plans to buy 92 Airbuses more worth $9 billion in an ambitious plan to expand its business scale.

Jetstar Pacific also has announced the plan to increase the number of aircrafts it has from five now to 16 in some more years.

The figures show that budget airlines have been prospering.

According to Vo Huy Cuong, Deputy Head of the Civil Aviation Authority of Vietnam (CAAV), budget airlines not only can exist in the economic downturn, but have been developing strongly because they have new clients – the ones who say “goodbye” to traditional airlines.

Jasmin Lee, a senior executive of the Malaysian AirAsia which provides 60 flights a week from Kuala Lumpur, Bangkok and Jakarta to Hanoi, Da Nang and HCM City, said AirAsia plans to increase the flight frequency to Vietnam, while considering opening the air routes to Hue and Nha Trang Cities. This is a part of the air carrier’s plan to ensure the 10-15 percent growth rate every year.

Also according to her, AirAsia is planning to penetrate the Vietnamese market by teaming up with a Vietnamese partner. The occupancy rate at AirAsia’s flights is always over 80 percent, or more than enough to break even.

Other big airlines like Emirates, Vector, Lion Air are also moving ahead with the plans to open more air routes to Vietnam. Meanwhile, Vietnamese budget airlines also plan to set up new international air routes, especially to South East Asia and Asia.

Luu Duc Khanh, Managing Director of Vietjet Air, while affirming that Vietjet Air would still focus on the domestic market where it can see great potentials, also said that it would fly on international routes.

In the immediate time, Vietjet Air would fly on the Hanoi – Seoul route in the fourth quarter of 2013, while it is considering opening the routes to China, Singapore, Hong Kong and Taiwan the next year.

After that, Russia, Australia and the US would be the next destinations of the air carrier.

According to Le Hong Ha, General Director of Jetstar Pacific, the domestic market has got narrower since the beginning of the year due to the lower demand, but the international flights can ensure the development of Jetstar Pacific

In March 2013, Jetstar Pacific began providing commercial flights from HCM City to Singapore, from Singapore to Indonesia with the frequency of one flight a day. It would also provide flights to other markets in South East Asia.

“With the opening of international routes, Jetstar Pacific hopes to reduce loss in 2013, then break even and make profit,” Ha said.

Vietjet Air came out three years later than Jetstar Pacific. However, by the end of September 2013, Vietjet Air had accounted for 22.9 percent of the market share, leaving the rival far behind with 13.5 percent of the market share.

According to CAPA, Vietjet Air has developed strongly after increasing the flight frequency of on some domestic air routes and opening new air routes, including the ones from Hanoi and HCM City to Bangkok in the first half of 2013.

Thanh Mai