Foreign airlines seek niche market in Vietnam

Malaysian budget carrier AirAsia has launched a few direct air routes from Thailand and Malaysia to the cities of Can Tho and Nha Trang.

The Can Tho-Kuala Lumpur air service was put into operation at the start of April, while two other air routes from Nha Trang and Can Tho to Bangkok, Thailand, were launched on May 1 and 2, respectively.

The Malaysian carrier operates these air services at a frequency of three or four weekly flights. The opening of these air routes was expected as the country’s major airports, such as Hanoi-based Noi Bai International Airport and Tan Son Nhat International Airport in HCMC, are overburdened.

Meanwhile, local airports, such as Can Tho International Airport, Nha Trang-based Cam Ranh Airport, Van Don Airport in the northern province of Quang Ninh and Cat Bi International Airport in the northern port city of Haiphong, boast great potential for growth.

Of these localities, Nha Trang City is the most attractive tourist destination, with international arrivals rising consistently over the past few years.

Statistics from the Civil Aviation Authority of Vietnam show that Cam Ranh International Airport welcomed three million tourists in 2018.

The direct air routes from Thailand and Malaysia to Nha Trang City are aimed at helping tourists fly directly to the city instead of transiting through Hanoi City or HCMC.

Besides this, Vietnam has issued a number of price and fee reduction policies at some airports to encourage airlines to launch more direct air routes to secondary airports to ease the overload being faced by airports in Hanoi and HCMC.

Given the high potential for tourism, the authorities of Can Tho City and the Mekong Delta provinces are ramping up tourism promotion activities to develop the sector.

Apart from this, foreign direct investment (FDI) in the Mekong Delta region from airlines launching routes to Can Tho City is on the rise.

Statistics from the Can Tho branch of the Vietnam Chamber of Commerce and Industry indicate that the FDI capital injected into the region totaled US$1.5 billion in 2018, accounting for 10.6% of the country’s total FDI capital, while the number made up 5% or 6% in previous years.

AirAsia’s decision to launch routes to Can Tho City was made following the success of routes to other secondary airports in Vietnam, including the Nha Trang and Phu Quoc airports.

In addition to AirAsia, other airlines in South Asia such as Bangkok Airways have launched direct routes to multiple secondary airports in the country.

In the wake of opening the Bangkok-Cam Ranh air route at the beginning of 2019, Bangkok Airways planned to launch more air services from Thailand to Van Don Airport in Quanh Ninh Province and Can Tho Airport.

Choosing the niche market in Vietnam is seen as a wise decision since it is less competitive but creates great opportunities for success.