VietJet plans Thai subsidiary
Kan Air president in talks on budget carrier
Published: 29 May 2013 at 00.00Newspaper section: Business
A move is under way for VietJet Air to set up a Thai subsidiary as the Vietnamese low-cost carrier (LCC) seeks to enter Thailand's highly contested market and spread its wings regionally.
VietJet Air operates six A320 aircraft, mostly on domestic routes in Vietnam, and has 20 more new A320s on order.
Talks are reportedly in an advanced stage between Ho Chi Minh City-based VietJet Aviation and Somphong Sooksanguan, president of Thai commuter airline Kan Air and owner of debt-collecting firm Kannithi Co, to form Thai VietJet Air.
Mr Somphong would own 51% of Thai VietJet Air, with the remainder owned by Vietnam's first privately owned airline, said an industry source.
Thai laws restrict foreign ownership of an airline established in the kingdom to fly domestic routes.
The creation of a Thai subsidiary represents a major move by VietJet Air, which was only launched in December 2011, to consolidate its presence in Thailand, where it is stepping up services to the socialist state.
VietJet Air, which caused a stir earlier this year by staging an in-flight bikini show on its inaugural flight to the Vietnamese resort of Nha Trang, launched a daily Bangkok-Ho Chi Minh City service on Feb 10.
The airline's first international route is operated by brand-new A320 narrow-body jets with 180 seats.
An executive of Quality Express Co, VietJet Air's Thai general sales agent, yesterday confirmed that the airline will launch a second Thailand-Vietnam daily service, Bangkok-Hanoi, on June 1. That will be its 11th route and second international service.
VietJet Air may add a second daily flight between Bangkok and Ho Chi Minh City later this year.
VietJet Air is the second established LCC in Asean to join Thailand's fast-growing budget air travel market, which is dominated by Thai AirAsia, part of Malaysia's AirAsia and Nok Air.
Lion Air, Indonesia's largest LCC, is making a similar move to establish a subsidiary airline, Thai Lion Air, and has already started recruiting pilots, cabin attendants and ground staff.
The source said Thai VietJet Air is expected to take to the skies in the next six months with an initial fleet of two A320s. It plans to operate domestic Thailand flights and connect the kingdom with other countries in the region.
It is not known if Thai VietJet Air would be based at Suvarnabhumi or Don Mueang airport, although VietJet Air's services are staged through Suvarnabhumi.
VietJet Air operates six A320s, mostly on domestic routes in Vietnam, and has 20 more new A320s on order.
Aircraft needed for Thai VietJet Air will be taken from the parent's pool.
While Thailand is the first frontier for its regional bid, VietJet Air is working on plans to start scheduled services from Ho Chi Minh City to Singapore, Inchon (South Korea), Narita (Tokyo) and Taipei.
International expansion will support its ambitious business plan.
Mr Somphong plans to expand his Kan Air fleet and to build an airport on Koh Phangan.