VietJetAir is ready for a landmark deal in Thailand

VietJetAir signed a memorandum of understanding to launch a joint vennture with Kan Air

The low-cost airline has taken initial steps to team up with Thailand’s Kan Air to launch a joint venture called Thai VietJetAir, which is expected to commence operation early next year with two or three Airbus 320 aircraft.

VietJetAir is expected to hold a 49 per cent stake in the joint venture with an option for the Vietnamese carrier to raise their holding to 60 per cent. The two airlines are working on the investment capital needed for the joint venture to take off.

The pending acquisition is a landmark for Vietnam’s aviation industry in which young airlines are usually a target for buyouts by foreign carriers.

As Vietnam opened the aviation industry to the private sector just a few years ago, the country’s private airlines are seeking cash and experience from foreign partners in earnest. However, Australia’s Qantas Airways is the only foreign airline to have teamed up with a Vietnamese carrier when they bought into Jetstar Pacific Airlines, while others such as Air Asia from Malaysia and Skywest from the US have failed to purchase a stake in Vietnamese carriers.

Now, VietJetAir has turned a new page for the local industry as it takes a bold move to expand international business through the purchase of a foreign airline with the aim to cash in on Thailand - a huge tourism market that aims to attract 25 million international visitors this year.

The president of Kan Air, Somphong Sooksanguan, even claimed that VietJetAir had truly impressed Thai teenagers, “which is an important advantage for how Thai VietJetAir will be welcomed in Thailand in the future.”

VietJetAir’s pending deal in Thailand is even more impressive when it is considered that two other young local peers, Air Mekong and Indochina Airlines, had to cease operations due to big losses in the face of competition from well-established national flag carrier Vietnam Airlines.

Despite being a young airline and having flied for just a year and a half, VietJetAir is now the only private carrier still in the skies. It has been expanding fast with more than 400 flights per week to 11 destinations in Vietnam and two international routes from Ho Chi Minh City and Hanoi to Bangkok.

In addition to its pending deal to expand operations within Thailand, the carrier has revealed its ambition to reach more international destinations.

“In the future we hope to make it even easier for Vietnamese and foreign travelers to enjoy high quality, low cost flights to Thailand, Singapore, Taiwan, Korea, and many more destinations,” said Desmond Lin, business development director of VietJetAir.

VietJetAir is currently operating a fleet of 8 modern Airbus A320 and will boast 10 aircraft by the end of this year.