Vietnam Airlines seeks 25 Airbus jets to revive its low-cost carrier

Vietnam Airlines is exploring a return to the low-cost segment with up to 25 Airbus single-aisle jets, aiming for next year, according to people familiar with the matter. The carrier has started contacting leasing companies for 20 to 25 A321neos seating 240 passengers to relaunch the venture. Earlier in the year, Vietnam Airlines obtained shareholder approval for a new medium-term strategy that includes running two brands: one full-service and one budget offering. The timeline and details of the low-cost plan are not finalized and could change based on market conditions. Vietnam’s rapidly growing economy is fueling expansion among competitors such as Vietjet Aviation and Sun PhuQuoc Airways. Competition is pressuring Vietnam Airlines, which held a 37% share of Vietnam’s domestic air travel market in October, versus 40% for Vietjet and 15% for Sun PhuQuoc, which launched in November last year. Vietnam Airlines’ no-frills efforts began in the 1990s with Pacific Airlines, later Jetstar Pacific, before reverting and currently operating limited services.