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Vietravel Airlines plans 6-fold increase in charter capital

Vietravel Airlines plans 6-fold increase in charter capital

Friday, February 10, 2023, 11:57 GMT+7
Vietravel Airlines plans 6-fold increase in charter capital
Passengers prepare to board a flight from Ho Chi Minh City to Thailand on February 9, 2022. Vietravel Airlines hopes to expand its international flight network. Photo: H.Yen / Tuoi Tre

Vietravel Airlines has proposed a road map to raise its charter capital from VND1.3 trillion (US$54.9 million) to over VND7.6 trillion ($320.8 million) by 2025, an increase of nearly 600 percent.

That figure is expected to continue rising until it hits VND8.3 trillion ($350.4 million) in 2030.

At a ceremony to launch an air route linking Ho Chi Minh City and Bangkok on Thursday, Vietravel Airlines chairman Nguyen Quoc Ky said the capital increase will allow the airline to expand its fleet.

The Ho Chi Minh City-Bangkok route joins Hanoi-Bangkok as the airline’s second international air service. 

Vietravel Airlines currently operates one flight per day on its Ho Chi Minh City-Bangkok route, with tickets starting at VND18,000 ($0.76), excluding taxes and fees.

The carrier operates a total of 20 daily flights departing from Hanoi, Ho Chi Minh City, Da Nang, Quy Nhon, and Phu Quoc.

It faced several obstacles when it first entered the aviation market two years ago, right at the peak of the COVID-19 pandemic, Ky said.

Though the domestic travel market has recovered since the pandemic was put under control, the international market is still struggling.

Nevertheless, Vietravel Airlines sees light on the horizon and hopes its planned fleet expansion will allow it to serve an expected influx of tourists, particularly on its Vietnam-Thailand route during the summer and festive seasons.

At present, Vietravel Airlines is one of six Vietnamese air carriers, which include Vietnam Airlines, Vietjet, Pacific Airlines, Bamboo Airways, and VASCO.

It now operates three Airbus A321s.

Fierce competition on Vietnam-Thailand routes

According to a report released by research firm Fitch Solutions, the international tourism sector is expected to develop strongly between 2023 and 2026. 

By 2026, it will have served 22 million tourists and earned $13.2 billion in revenue.

Thailand is considered a key market for Vietnamese tourism, and the introduction of new low-cost routes is sure to attract revenue, particularly given tighter travel budgets in the wake of the pandemic.

Airlines have increased the frequency of flights and begun offering competitive airfares.

As a result, the airfare for flights from Ho Chi Minh City to Thailand is sometimes lower than that for services from Ho Chi Minh City to Hanoi.

In addition to Vietnamese airlines, foreign carriers such as AirAsia and Nok Air also run flights between Thailand and Vietnam.

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Thanh Ha - Cong Trung / Tuoi Tre News

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