International budget airline planning to launch in Australia, take on local duopoly
An international airline is plotting an entrance to the Australian domestic market, in a move experts say would “transform” the local aviation industry.
Low-cost Vietnamese airline VietJet Air is planning to go up against local juggernauts Qantas and Virgin by seeking regulatory clearance to operate domestically in Australia.
VietJet Air is understood to have applied for clearance to begin domestic operations in Australia. Supplied
If approved by the Civil Aviation Safety Authority, VietJet would operate under a different name using the airline’s small Boeing 737s.
It would then set up its own Australian subsidiary, capitalising on landing space opening up on the tarmac in Sydney.
It would be a brave step for the Asian carrier, as several other airlines have failed to overcome the Qantas-Virgin duopoly that dominates Australia.
Singapore Airlines’ budget subsidiary Tiger Airways was the last international airline to stake a claim in the Australian domestic market, when it launched in November 2007.
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Flights operated under Singapore parent company until 2013, when it was absorbed by Virgin Australia and rebranded to Tigerair Australia.
The airline collapsed in March 2020 owing to the COVID pandemic.
Other local airlines have also failed in their own pursuit for a presence at domestic terminals.
Bonza flights were grounded in July 2024, less than 12 months after the budget carrier launched.
Regional Express Airlines (Rex) scaled back operations to only regional services around the same time, before it was saved by a US buyer in October.
VietJet Air first landed in Australia in 2023 with flights to Ho Chi Minh City. Supplied
Aviation expert Peter Harbison said VietJet’s presence in the domestic market would have a “massive impact”.
“The big difference here is it’s a well-established airline, it’s got very substantial financial backing, and secondly it’s also an international airline that knows the Australian market very well,” Harbison said.
“It would transform the market no doubt about it.”
If successful, VietJet’s presence at domestic terminals could help drive down fares.
Harbison estimated local VietJet flights could be “pretty easily” taking off in as soon as six to nine months if the regulatory watchdog gives it the green light.
The airline first arrived in Australia three years ago with flights from Australian capital cities to Ho Chi Minh City.
It has already spread its wings throughout Asia with subsidiaries in Thailand and Kazakhstan.
Melbourne Airport chief executive Lorie Argus welcomed the idea of the Vietnamese airline joining the local market.
Virgin Australia and Qantas group make up 99 per cent of the domestic aviation market. Getty
“We’ve certainly got room, of course we’ll have room from an infrastructure perspective,” Argus said.
The Civil Aviation Safety Authority said it does not comment on airlines’ commercial plans.
In a statement, VietJet told nine.com.au it “continuously evaluates opportunities for international cooperation and growth that align with our long-term strategy”.
“However, we do not comment on market speculation,” a VietJet spokesperson said.
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