Vietnamese Budget Carrier VietJet Eyes Australian Domestic Market

Budget airline VietJet is seeking permission to launch domestic flights within Australia, a move that could significantly disrupt the established duopoly of Qantas and Virgin. The Vietnamese carrier has applied to the Civil Aviation Safety Authority (CASA) for approval to operate up to 10 Boeing 737 aircraft domestically.

If approved, VietJet would be the first international airline in over a decade to directly challenge the dominance of the two major Australian carriers in the domestic market. Aviation analyst Peter Harbison noted that VietJet's substantial financial backing and experience as an international airline familiar with the Australian market differentiate it from previous challengers like Rex, OzJet, and Air Australia.

"It would transform the market, no doubt about it," Harbison told Nine.

The airline currently offers direct international services between Ho Chi Minh City and Sydney, Melbourne, Brisbane, Perth, and Adelaide. Its existing domestic operations in Thailand and Kazakhstan provide it with experience in managing low-cost networks outside its home country.

The timing of VietJet's proposed expansion could be opportune, coinciding with the planned opening of Western Sydney Airport in October. Harbison suggested that the availability of slots at the new airport could be a critical factor in the airline's potential success.

Australia's domestic aviation sector has historically been challenging for new entrants. Since the collapse of Ansett in 2001, numerous carriers, including Impulse (later absorbed into Jetstar), OzJet, Air Australia, Tigerair Australia, and Bonza, have failed. Regional carrier Rex also attempted to compete on major routes before withdrawing and ultimately collapsing.

CASA's assessment process for such applications typically takes around six months.