Jetstar Announces Melbourne and Sydney to Ho Chi Minh City

6th Apr 2017

11 Years following its first run in Vietnam, Jetstar Australia returns to there with two routes to Ho Chi Minh City. The subsidiary of Qantas Airways announced on Wednesday that it will start flying Melbourne-Ho Chi Minh City and Sydney-Ho Chi Minh City from May, 2017.

This way, Jetstar Australia wants to take advantage of the strong economic growth and the rapidly growing tourism sector in Vietnam. In 2016, for instance, there were more than 52 million air travelers recorded in Vietnam, or 29% more than last year. Of that number, 28 million were domestic passengers, showing a year-on-year growth of 30%.

A lot of this growth can be attributed to cheaper air fares and increasing incomes. Furthermore, the trend doesn't seem to have any inclination of slowing down or stopping in the next few years. In fact, industry experts project that the passenger number will reach 122 million in the next three years.

The increase in passenger numbers in Vietnam is not followed by the improvements in the aviation infrastructure, however. Many flights are delayed or canceled, the local airports are overloaded and there's a myriad other problems the civil aviation sector in Vietnam is facing as well. Bottlenecks have become such an issue, in fact, that the Vietnamese aviation authorities have raised a cap on new planes local carriers are allowed to purchase in the next four years.

At this point, the three local airlines ? Jetstar Pacific, Vietnam Airlines and VietJet Air are holding 95% of the market share. Jetstar Pacific is 30% owned by Qantas. 50 foreign airlines fly 78 routes to the country.

One additional problem, airlines face in Vietnam is the price competition. Vietnam Airlines and Jetstar Pacific have agreed to call for minimum prices to be set in order to deal with this, but VietJet has refused to do so, saying that the price floors are against the country's competition laws and established international practices.

Together, the three Vietnamese carriers had a combined fleet of 150 in 2016, which is expected to grow to 230 by 2020.