VietJet Brings Low-Cost Model to Hanoi - Siem Reap Route

Low-cost Vietnamese carrier VietJet has confirmed it will introduce its first flights into Cambodia next month as it further expands its international network. The private entity, a subsidiary of real estate specialist and Ho Chi Minh City Home Development Commercial Joint Stock Bank (HD Bank) shareholder, Sovico Holdings, will introduce a daily link between Hanoi and Siem Reap from November 3, 2014.

As the gateway to the stunning temples of Angkor, a UNESCO World Heritage Site, Siem Reap is a hugely popular resort town, which has been attracting more and more Vietnamese tourists in recent years. This new direct route linking Hanoi with Siem Reap will tap demand for travel between the two hubs while further boosting the development of trade and tourism between Vietnam and Cambodia.

“We are delighted to introduce Siem Reap as our latest destination and further demonstrate our strong commitment to developing the most dynamic flight network across the Asia Pacific region,” said Desmond Lin, business development manager, VietJet. “With its rich culture and fascinating heritage, Siem Reap is one of the most awe-inspiring destinations for travellers all over the world.”

A total of nine different airlines have operated flights on this international city pair over the last ten years but the route continues to be dominated by Vietnam Airlines which currently offers up to five flights per day. Alongside the operation of the Vietnamese national carrier, flown using Airbus A321s, Skywings Asia Airlines has served the route since March 2011 and currently provides a daily A320 rotation. Cambodia Angkor Air, a joint venture between the Cambodian government (51 per cent) and Vietnam Airlines (49 per cent) has also served the route during the past two years using an A321.

In our analysis we look in more detail at passenger flows between Hanoi and Siem Reap over the past ten years. Our data shows that around 62.2 per cent of the traffic on this route is local point-to-point demand, but Vietnam Airlines is able to support this with connecting traffic via Hanoi Nội Bài International Airport.

In 2013 approximately 37.7 per cent of the traffic between the cities connected in the Vietnamese city to another destination, with the share much higher (47.7 per cent versus 26.5 per cent in other direction) on the leg outbound from Cambodia. VietJet will hope to stimulate the local traffic through its low-fares to successfully compete on the route.

In the chart, below, we highlight the point-to-point and total traffic on the route. The increasing gap between the two lines highlights the growing amount of connecting passengers now flying between the two destinations.

Data provided by Sabre

Alongside the new route to Cambodia, VietJet air will also inaugurate a five times weekly flight between Ho Chi Minh and Taipei from December 12, 2014, as it further expands the reach of its network. These two new international routes follow the launch of a second daily rotation on the Ho Chi Minh – Bangkok route last month.

“Our goal is to continue to offer more flying opportunities to residents of Vietnam and other countries in Asia as well as tourists travelling through the region. Every day we strive to improve and enhance our services, facilitating tourism growth and contributing to the economic development of the region,” added Lin.

Richard Maslen

Richard Maslen has travelled across the globe to report on developments in the aviation sector as airlines and airports have continued to evolve and…