Vietnam Airlines adapts dual-brand strategy

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jetstar hostessesAhead of its much-anticipated initial public offering (IPO), Vietnam Airlines is implementing a dual-brand strategy for the parent company and its budget subsidiary Jetstar Pacific.

Facing increasing competition from private carrier Vietjet, the Vietnam Airlines Group is eager to tap into growing demand for services to, from and within Vietnam by expanding both brands.

Vietnam Airlines has owned a majority stake in Jetstar Pacific since early 2012, when it took over a 70 per cent stake previously held by Vietnam’s State Capital Investment Corporation (SCIC). The Australia-based Jetstar Group acquired in 2007 an initial 27 per cent stake in the carrier, then known as Pacific Airlines. The carrier adopted the Jetstar brand in 2008 as it completed a transition to the low-cost model.

The Jetstar Group increased its stake in Jetstar Pacific from 27 to 30 per cent at the same time the majority 70 per cent stake was transferred from SCIC to Vietnam Airlines. The flag carrier is owned by another arm of the Vietnamese Government and is now preparing for partial privatisation with an initial public offering slated for the end of the second quarter of 2014 that could see the government reduce its stake to between 65 and 75 per cent.

A public listing for Vietnam Airlines could have a profound impact on Jetstar Pacific. Despite the launch and rapid rise of VietJet, Jetstar Pacific has not pursued significant expansion since becoming part of the Vietnam Airlines Group. The new investors will likely expect – and possibly demand – a more aggressive response from Vietnam Airlines and a more rapid implementation of the group’s dual-brand model.

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Reading Time: 2 minutes

Ahead of its much-anticipated initial public offering (IPO), Vietnam Airlines is implementing a dual-brand strategy for the parent company and its budget subsidiary Jetstar Pacific.

Reading Time: 2 minutes

jetstar hostessesAhead of its much-anticipated initial public offering (IPO), Vietnam Airlines is implementing a dual-brand strategy for the parent company and its budget subsidiary Jetstar Pacific.

Facing increasing competition from private carrier Vietjet, the Vietnam Airlines Group is eager to tap into growing demand for services to, from and within Vietnam by expanding both brands.

Vietnam Airlines has owned a majority stake in Jetstar Pacific since early 2012, when it took over a 70 per cent stake previously held by Vietnam’s State Capital Investment Corporation (SCIC). The Australia-based Jetstar Group acquired in 2007 an initial 27 per cent stake in the carrier, then known as Pacific Airlines. The carrier adopted the Jetstar brand in 2008 as it completed a transition to the low-cost model.

The Jetstar Group increased its stake in Jetstar Pacific from 27 to 30 per cent at the same time the majority 70 per cent stake was transferred from SCIC to Vietnam Airlines. The flag carrier is owned by another arm of the Vietnamese Government and is now preparing for partial privatisation with an initial public offering slated for the end of the second quarter of 2014 that could see the government reduce its stake to between 65 and 75 per cent.

A public listing for Vietnam Airlines could have a profound impact on Jetstar Pacific. Despite the launch and rapid rise of VietJet, Jetstar Pacific has not pursued significant expansion since becoming part of the Vietnam Airlines Group. The new investors will likely expect – and possibly demand – a more aggressive response from Vietnam Airlines and a more rapid implementation of the group’s dual-brand model.

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