AirAsia to help put Vietnam’s Phu Quoc island on the international map

In early November, AirAsia will become the first Southeast Asian LCC to operate international services to Phu Quoc, a Vietnamese island that has long been popular for domestic tourism and is starting to gain international attention.


Summary

  • AirAsia is launching flights to Phu Quoc from Kuala Lumpur in early November.
  • AirAsia will provide the only year-round international LCC flight at Phu Quoc.
  • While LCCs Jetstar Pacific and VietJet dominate the Phu Quoc domestic market, the only current scheduled international LCC service at Phu Quoc is a seasonal flight from Kunming operated by Lucky Air.

AirAsia plans to operate four weekly flights to Phu Quoc from Kuala Lumpur starting 2-Nov-2018. Phu Quoc will be AirAsia’s fifth destination in Vietnam. The AirAsia Group serves Da Nang, Ho Chi Minh and Hanoi from both Bangkok and Kuala Lumpur while Nha Trang is only served from Kuala Lumpur. The group added two LCC routes to Vietnam in 2017 – Bangkok-Da Nang and Kuala Lumpur-Nha Trang. The upcoming launch of Kuala Lumpur-Phu Quoc will give the AirAsia Group eight LCC routes to Vietnam, which over the last few years has emerged as Southeast Asia’s fastest growing market.

Vietnamese LCCs Jetstar Pacific and VietJet currently have large domestic operations at Phu Quoc but do not have any scheduled international flights from the island. LCCs currently account for 72% of domestic seat capacity at Phu Quoc but only 13% of international seat capacity (according to CAPA and OAG data for the week commencing 24-Sep-2018). The only scheduled international LCC flight at Phu Quoc is currently operated by China’s Lucky Air.

Phu Quoc is also currently served by three foreign full service airlines – Asiana, Bangkok Airways and China Southern. Vietnam Airlines also currently has one international route at Phu Quoc – a thrice weekly service to Shanghai.

China Southern launched three weekly flights to Phu Quoc from Guangzhou in 2016 and earlier this year upgraded the route to daily. Asiana has operated a twice weekly flight from Seoul to Phu Quoc since Oct-2017. Bangkok Airways launched four weekly flights from Bangkok to Phu Quoc in late Oct-2017 and is upgrading the route to daily in late Oct-2018.

Lucky Air serves Phu Quoc from Kunming on a seasonal basis with up to three weekly flights. AirAsia will be the only LCC operating a year-round scheduled international service.

AirAsia should help Phu Quoc attract more overseas visitors and enable the airport to continue growing its international passenger traffic. Phu Quoc Airport handled only 361,000 international passengers in 2017 compared to 2.6 million domestic passengers. However, international traffic has been growing rapidly over the last few years (albeit on a very small base) and the resort island is starting to gain notoriety outside Vietnam.

AirAsia should particularly help Phu Quoc develop new source markets in Southeast Asia and attract visitors from Australia and India. AirAsia is selling one-stop connections from Phu Quoc to around 20 destinations in 10 countries. Phu Quoc enjoys visa free status while the rest of Vietnam requires visas for most nationalities, which should help AirAsia attract passengers in several one-stop markets.

So far most of Phu Quoc’s international tourists are from North Asia, Russia and Europe. Russian charter operators and European leisure or charter airlines now serve Phu Quoc on a seasonal basis (during the northern winter). Bangkok Airways has mainly carried European tourists on its Phu Quoc flights as it partners with several European airlines that serve Bangkok as well as all three Gulf carriers (which carry a large volume of European passengers on their Bangkok flights). AirAsia will make Phu Quoc more accessible from Australia, India and several Southeast Asian countries while its low fares will stimulate demand, resulting in more overseas tourists experiencing the beaches of Phu Quoc.