VietNamNet Bridge - Behind the current sales promotion campaigns for zero-dong and super-cheap fares is stiff competition among low-cost air carriers (LCC).

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Since February 1, Vietjet Air has been providing three commercial flights a week between Hanoi and Taipei, together with seven flights a week between HCM City and Taipei. This is the latest air route put into operation by the air carrier which opened six new routes just in the last three months.

In late January, Vietjet opened three new air routes at the same time – Pleiku-Hai Phong, Pleiku-Vinh City and HCM City-Tuy Hoa. Three others between Hanoi and Chu Lai, Hai Phong and Cam Ranh, and Vinh and Buon Ma Thuot began serving passengers in November 2015.

In November 2015, the LCC signed a contract in Dubai with Airbus on buying 30 next-generation A321s worth $3.6 billion, following accontract signed with the manufacturer on buying and chartering 100 A320s and A321s two years ago.

About 130 aircrafts will be delivered to Vietjet from now to 2020 to serve its plan to expand the operation in Asia.

Behind the current sales promotion campaigns for zero-dong and super-cheap fares is stiff competition among low-cost air carriers
It is expected that the carrier would receive 8-12 next-generation fuel saving aircraft every year.

When opening the three routes from Pleiku to Hai Phong, from Pleiku to Vinh and from HCM City to Tuy Hoa, it launched 50,000 tickets at zero dong.

Meanwhile, backed by the national flag air carrier Vietnam Airlines and Australian Qantas, Jetstar Pacific has also spent big money to compete with colleagues. In early 2016, it ran a sales promotion program with 20,000 cheap tickets launched, priced from VND16,000, for flights on both domestic and international routes.

In late January 2016, it once again marketed 20,000 low-cost tickets priced from VND49,000.

Prior to that, in 2015, Jetstar Pacific opened a series of new air routes, including the HCM City-Da Lat, Vinh-Cam Ranh and Hanoi-Tuy Hoa. The Hanoi-Hong Kong and Da Nang-Singapore also opened last year.

A report of the Civil Aviation Authority of Vietnam (CAAV) showed that in the first 10 months of 2015, Jetstar carried 3.2 million passengers, while Vietjet served 7.3 million passengers. 

Vietnam Airlines still leads the market, but its market share has dropped from 56.6 percent in 2014 to 47.6 percent in 2015.

The CEO of an LCC commented that there is a ‘great war among LCCs’. Every time when an LCC launches sales promotion campaigns or opens new air routes, others will market zero-dong tickets to attract passengers.

The CEO commented that the competition among carriers has become so stiff that they accepted to take a loss to scramble for passengers. In principle, the ticket price must be VND700,000-800,000 for air carriers to break even, but they are willing to sell tickets at VND500,000.


NLD