How one visionary set an airline soaring to lofty heights
On 1 June, Vietjet, Vietnam’s iconic low-cost carrier, made history in Malaysia. Flight VJ825 arrived in KLIA from Ho Chi Minh city, making it the airline’s maiden journey to Malaysia. It set a new precedent for budget travel within the region. Hailing itself as a new-age carrier for modern times with a rather cordial reputation with its “fun and quirky” approach to service, Vietjet has experienced rapid growth in recent times, and continues to reach for the skies, establishing itself as a force to be reckoned with in the region.
While actively expanding its local network within Vietnam, the opening of the new Kuala Lumpur route comes as part of Vietjet’s vast international expansion plan, which currently includes 17 destinations worldwide. This figure is set to more than double to 36 international destinations by the end of 2018.
Much like any success story however, this one did not happen overnight or by miracle or some stroke of luck. It all started with the foresight of one brilliant visionary – Vietjet founder and CEO, Nguyen Thi Phuong Thao, or Madam Thao, as she is known in the industry.
It was the perfect case of Madam Thao having the sound judgement to leap into the business, backed by more than 10 prior years of research into the aviation industry. Within a short period of time, Madam Thao was able to convert a relatively non-existence industry in Vietnam into a thriving low-cost carrier now taking Asia (and the world!) by storm.
“Our vision is to become a favourite multinational airline,” says Madam Thao. “We are dedicating ourselves to spur the future of air travel by bringing about a breath of fresh air to the industry, which I believe will support our foray into new international markets. Our operations and effective cost management have caused us to rank among the fastest growing airlines in the world,” she adds.
Madam Thao’s brilliance and expertise has placed Vietjet in a good position within the market. The airline commits itself to avoiding “fare wars” among airlines. Instead, its focus is to emphasize more on low fares and offering distinct service compared to other airlines, while establishing a dynamic labour force. Madam Thao also adds that Vietjet will continue to explore new markets and build a loyal base of first-time flyers, to ensure repeat business. The airline also looks to build its ancillary income, which has enjoyed an annual growth rate of 3% of the total revenue.
Contributing to this growth is the recently mooted ASEAN open skies policy and the burgeoning Vietnamese economy, which Madam Thao and her able team efficiently tapped into.
“Vietnam boasts a dynamic market – the fastest developing in the Asia Pacific region. This was proven by Vietnam’s RPK CAGR from 2004 to 2014, which performed 17.2% higher than the APAC average of 9.8%” says Madam Thao. “
Furthermore, she adds that other conditions, including the growing Vietnamese population (reaching the 100 million mark), a diverse terrain lacking efficient road and railway infrastructure and an 11% tourism boost in the last four years have also contributed to the successful “take-off” of Vietjet.
Meanwhile, Vietnam’s aviation industry maintains a robust outlook. Besides implementing firmer policies on granting AOCs (Air Operator’s Certificates), the Vietnamese government has implemented further strategies which have led to the growth of private businesses, in which it continues to invest. In the aviation sector, the government as pledged a USD 10 billion boost in infrastructure, including four new airports by 2020, totaling 26 airports altogether in the country.
Indeed, all these internal and external factors have contributed immensely towards the growth of Vietjet. It all started with a far-sighted vision of a brilliant leader, supported by a very able team of industry professionals. And the results are clearly evident.
“We achieved magnificent records in the aviation industry. We saw profits coming in during our second year in operations. Our fleet and operational revenue have continued to grow over the years. Our fifth year in the market saw a threefold increase in revenue, compared to our third year of operations,” explains Madam Thao.
Vietjet’s webpage www.vietjetair.com currently receives 15 to 20 million page views annually.
“Due to favourable customer demand, we also apply advanced technology to seamlessly integrate other channels of into our website operations to include services such as shopping, insurance and accommodation,” says Madam Thao.
Indeed, in light of all these favourable conditions, Madam Thao and her team can certainly count on the fact that things are indeed looking up for Vietjet and fans of low-cost air travel.
