Thai VietJet Air Raring To Enter Thai Market

6th Jan 2015

The airline is the newest player to enter the budget travel market in Thailand, which is the region's most visited country in 2013.

Thai VietJet Air is a product of a joint venture between VietJet Air and Thailand's Kannithi Aviation which also operates Kan Air, a domestic carrier. The former holds the 49% of the equity, while the latter owns the remaining stakes. It secured its license to operate on December 20 last year.

It will initially operate a single aircraft, the narrow-body A320 jetliner, during the launch of its inaugural operations this year from its hub in Suvarnabhumi Airport on domestic routes.

Local industry players have been worrying about its entry saying the domestic market is already saturated with another budget carrier taking a share of the pie. According to an analyst, the addition of another low-cost carrier would naturally saturate the market, as the shares of some existing players will certainly decrease.

Already, three of the country's local players, namely, Thai AirAsia, Nok Air, and flag carrier Thai Airways are feeling the heat generated by tough competition. The three airlines posted a sharp drop of their profit margin during the last fiscal year. The country's recent political crisis that lasted for four months from November 2013 until the ouster of its Prime Minister in May 2014, was blamed for the sagging performance of the local airlines in general.

Bangkok Airways was reportedly the only local carrier that reported profit during the same period.

Thai Airways, for its part, has seen its profit declining since the first half of 2013. The flag carrier has been slowly but continuously pushed out of the markets that it has long traditionally dominated for years by rival carriers from the Gulf.

The traditionally lucrative source markets for Thai Airways like Europe, Australia, and North America are gradually gobbled up by strong competition from state-owned and well-oiled carriers from the Middle East like Emirates, Etihad, and Qatar Airways.

With the entry of Thai VietJet Air in the domestic market, Thai Airways' share in the domestic market may possibly shrink further.

Airline officials though didn't divulge as to the launch routes of Thai VietJet Air when it commences operations.

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