Thai VietJet taxis closer to taking off

The plan to create a Thai offshoot of Vietnam's no-frills carrier VietJet Air has been firmed up with a joint venture agreement set to conclude in Bangkok on Wednesday.

One plane of VietJet Air’s fleet in Vietnam. A deal is almost set that will see a Thai subsidiary of the neighbouring country’s low-cost carrier taking to the skies here.

Somphong Sooksanguan, president of the Thai commuter airline Kan Air and owner of the debt-collecting firm Kannithi Co, has confirmed holding a 51% share in Thai VietJet Air, with the Ho Chi Minh City-based VietJet Aviation owning 49%.

The conclusion of the accord, in the form of a memorandum of understanding (MoU) to be witnessed by a Vietnamese deputy prime minister, will trigger the entry of yet another foreign player into Thailand's hotly contested budget airline stakes.

Lion Air, Indonesia's largest low-cost carrier (LCC), and AirAsia X, the long-haul no-frills affiliate of Malaysia's AirAsia Group, will also descend into Thailand in the coming months on the pretext of being Thai-registered subsidiary airlines with Thai stakeholders.

Thai VietJet Air's corporate structure is in line with minimum requisites set by Thailand's Civil Aviation Department _ a 49:51 ownership split between foreign and Thai entities and initial registered capital of 200 million baht.

Mr Somphong told the Bangkok Post that Thai VietJet Air is expected to take to the skies in November with two Airbus 320-200 single-aisle jets based at Bangkok's Suvarnabhumi airport.

Thai VietJet Air's maiden flights are planned to be domestic trunk routes such as those from Bangkok to Chiang Mai and Phuket as well as flights to certain neighbouring countries such as Myanmar, Laos and Cambodia.

After Wednesday's MoU, both Thai and Vietnamese partners will proceed to finalise pending details of the joint venture and obtain the necessary permits.

VietJet Air commenced a daily Bangkok-Ho Chi Minh City flight on Feb 10, adding daily Bangkok-Hanoi service on June 1.

Mr Somphong acknowledged making overtures to establish the joint venture with Vietnam's first privately owned airline and LCC, which was only launched in December 2011.

"Having an alliance with existing facilities, support and experience is the best and quickest way to start up a new airline," he said.

Thai VietJet Air will be another major extension of Mr Somphong's aviation-related business, which now envisages a fleet expansion for Kan Air and building a small airport on Koh Phangan, the Gulf of Thailand island popular for its full-moon parties and as a backpacker destination.

Mr Somphong's Kannithi Aviation Co, the Thai stakeholder in Thai VietJet Air, has prepared a team of Thai personnel comprising 30 cabin attendants, eight cockpit staff and four aviation engineering specialists to support the new airline.

VietJet Air currently boasts a network of 11 domestic Vietnamese routes and its two Bangkok routes. On the radar screen is service to Taiwan, South Korea, Singapore, Malaysia and Japan.

The carrier operates 300 flights a week.

Earlier this month, VietJet Air took delivery of two more brand-new A320 jets, thus ramping up its fleet of such aircraft to eight overall. It will take delivery of 18 more new A320s in the coming years.

About the author

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Writer: Boonsong Kositchotethana
Position: Deputy Editor Business