Vietjet (VJC) and Vietnam Airlines Control 90% of Aviation Market Share, as Asian Giant Still Harbors Ambitions to Enter

AirAsia and its Two-Decade Dream of Entering Vietnam

In an exclusive interview with Bernama news agency on the sidelines of the 2025 ASEAN Economic Ministers' Meeting, Mr. Tan Sri Tony Fernandes—CEO of Capital A, AirAsia's parent company—revealed that the airline is in talks with a partner in Vietnam to expand its presence.

“It’s no secret that I have wanted to operate in Vietnam for a long time. It is one of the most dynamic and potential-rich markets in ASEAN, and having a presence here is a logical step for AirAsia,” Mr. Fernandes affirmed. However, he also candidly stated that while the discussions are progressing positively, many challenges remain before a final agreement can be reached.

AirAsia is Asia's leading low-cost airline, headquartered in Kuala Lumpur, Malaysia, with a network of over 160 destinations in 25 countries. In addition to its domestic market, the airline has established joint ventures in Thailand, Indonesia, the Philippines, and Cambodia.

In reality, over the past two decades, AirAsia has made numerous attempts to enter Vietnam. These include a plan to participate in the restructuring of Pacific Airlines in 2005, a partnership with Vinashin to establish Vina AirAsia in 2007, and the signing of a memorandum of understanding with Hai Au Aviation in 2018; however, all these efforts were unsuccessful.

 

Vietjet and Vietnam Airlines Dominate 90% of the Domestic Market

In the first 8 months of 2025, Vietnam's aviation market was almost completely dominated by Vietjet and Vietnam Airlines. According to statistics, Vietnam Airlines currently holds a 44.4% share of domestic passengers, while Vietjet accounts for 44.7%. Together, these two airlines control nearly 90% of the domestic market. On international routes, Vietnam Airlines' market share is 17.7%, while Vietjet's is 23.2%. The remaining airlines, such as Bamboo Airways, Vietravel Airlines, Pacific Airlines, and Vasco, hold only a small fraction, not enough to create a breakthrough.

Vietnam Airlines (HVN) currently operates 106 routes, including 22 domestic and 36 international routes to 20 countries. Its fleet consists of 103 aircraft, including 6 ATR72s, 80 Airbus jets, and 17 wide-body Boeing aircraft. The airline is considering leasing or purchasing an additional 30 wide-body A350-900 or Boeing 787-9 aircraft, with a total investment that could reach up to $10 billion.

Vietjet (VJC)—the largest private airline in Vietnam founded by billionaire Nguyen Thi Phuong Thao—also boasts a fleet of 122 aircraft, with hundreds more on order for future delivery. As of the end of Q2 2025, the airline operated 154 routes, with 109 of them being international. Vietjet's strategy shows a clear priority for expanding into foreign markets, focusing on the low-cost travel segment.

 

The Rise of the "Newcomers"

Besides the two giants dominating the market, Vietnam is welcoming new players.

Sun PhuQuoc Airways—an airline under Sun Group—received investment approval in May 2025 with a capital of 2,500 billion VND. The airline has already received 3 A321 aircraft and expects 4 more by the end of the year. In 2026, its fleet will expand by another 8 aircraft to serve international routes. According to the plan, Sun PhuQuoc Airways will begin ticket sales on October 15 and launch its first commercial flight on November 1, 2025, connecting directly with Sun Group's resort destinations.

Meanwhile, Vietravel Airlines—founded in 2019—is also undergoing a transformation after a shareholder group related to T&T Group acquired a 75% stake in late 2024. In the first half of 2025, the airline operated 2,209 flights, carrying 400,000 passengers. Its charter capital was increased to 2,600 billion VND. The airline currently has a fleet of 3 aircraft and aims to expand to at least 10 this year, primarily Airbus A321/A320 models, while also aggressively expanding its route network.

Given the current landscape, AirAsia's ambition to enter Vietnam is no easy feat. The market is already "at capacity," with 90% of the share held by Vietnam Airlines and Vietjet, while newcomers backed by major domestic corporations are accelerating their growth.

Nevertheless, Vietnam's aviation market is still considered to have immense potential, thanks to its fast-growing economy, expanding middle class, and a growing number of international tourists.