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How will Bamboo Airways affect the aviation market?

The national flag air carrier Vietnam Airlines and the private Vietjet Air continue to dominate the domestic aviation market, but newcomers may begin to take away some market share. 
VietNamNet Bridge - The national flag air carrier Vietnam Airlines and the private Vietjet Air continue to dominate the domestic aviation market, but newcomers may begin to take away some market share. 


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Vietnam Airlines and Vietjet continue to dominate the domestic market



VIRAC, a market analysis firm, said the Vietnamese air transport market includes 63 foreign airlines from 25 countries and territories which provide routine flights to and from Vietnam.

The airlines, plus three Vietnamese carriers, Vietnam Airlines, Vietjet Air and Jetstar Pacific Airlines, provide flights on 105 international air routes.

According to VIRAC, Vietjet, with 43 percent of market share, and Vietnam Airlines, with 42 percent in 2017, are the biggest market share holders and most profitable.

According to VIRAC, Vietjet, with 43 percent of market share, and Vietnam Airlines, with 42 percent in 2017, are the biggest market share holders and most profitable.

Vietjet, a low cost carrier, has had steady 2-digit growth rates for many years – VND27.5 trillion in 2016 and VND42.3 trillion in 2017, which demonstrated sharp growth rates of 40 percent and 54 percent, respectively, compared with previous years.

In 2018, it reported revenue of VND52.4 trillion, an increase of 24 percent over the year before, and pre-tax profit of VND5.83 trillion.

As for Vietnam Airlines, revenue of VND73 trillion was reported for the first three quarters of 2018, up by 18 percent compared with the same period in 2017.

Jetstar Pacific has also been doing well in the last two years with revenue in the first seven months of 2018 increasing by VND523 billion compared with the same period in 2017.

More foreign carriers, encouraged by the prosperity of Vietnamese airlines, are attempting to join Vietnam’s market.

Air Asia and Lion, the leading air carriers in Southeast Asia, are considering setting up joint ventures with Vietnamese partners. 

Vietstar, another Vietnamese airline, received a license recently and announced it will begin providing services this year end or early next year.

Analysts said if the Vietnam AirAsia joint venture of AirAsia and Batik Vietnam of Lion Group becomes operational, the market will become more cutthroat.

Most recently, Vietravel, one of the biggest travel firms in Vietnam, has plans to establish an airline.

Bamboo Airways, the newcomer, has announced that it will focus on direct flights from overseas to tourist sites in Vietnam, including areas where FLC, the holding company of Bamboo Airways, is developing real estate projects. 

The areas include Quy Nhon, Nha Trang and Thanh Hoa in the central region, Quang Ninh and Hai Phong in the north and Phu Quoc Island in the south. 

An analyst said that Bamboo Airways is following a wise strategy as it doesn’t intend to gather strength on the key backbone air routes, which have been developed by Vietnam Airlines for many years.


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