Bangkok Airways expands in Vietnam, focuses on secondary destinations as visitor numbers soar

Thailand-based Bangkok Airways is pursuing further expansion in secondary Vietnamese markets with the launch of services to Nha Trang.

The carrier has had a strong presence for several years in neighbouring Cambodia, Laos and Myanmar. It currently is the largest airline in both the Cambodia and Myanmar international markets by seat capacity. However, Bangkok Airways only commenced operating in Vietnam in May-2016, when it launched four times weekly Bangkok-Da Nang A319 service.

Summary:


  • Bangkok Airways plans to launch services from Bangkok to Nha Trang this winter, which will become its fourth new route to Vietnam in less than three years;
  • Bangkok Airways launched services from Bangkok to Da Nang in 2016, from Bangkok to Phu Quoc in 2017 and from Chiang Mai to Hanoi earlier in 2018;
  • Bangkok Airways is the only operator on most of its Vietnam routes and has significantly improved connectivity from secondary destination in Vietnam to Europe;
  • Visitor numbers to Vietnam have grown at 25% to 30% clip the last three years, leading to new opportunities in secondary markets.

The inaugural entry to the market quickly proved to be successful, prompting Bangkok Airways to upgrade Bangkok-Da Nang frequency to daily in early 2017 and consider other destinations in Vietnam. In Oct-2017, Bangkok Airways added services from Bangkok to Phu Quoc, initially operating four weekly flights with ATR 72s. Phu Quoc is now served with five weekly flights and will be upgraded to daily in late Oct-2018.

Bangkok Airways added a third route to Vietnam in Mar-2018, with the carrier launching a daily Chiang Mai-Hanoi service with ATR 72 equipment. The airline is planning to add a fourth route to Vietnam with Bangkok-Nha Trang service this winter, although it has not yet set a launch date or initial schedule.

Bangkok Airways’ growth in Vietnam has not surprisingly coincided with a huge increase in visitor numbers to Vietnam. Visitor growth accelerated from the low single digits in 2014 and 2015 to 26% in 2016. Visitor numbers to Vietnam surged by 29% in 2017, reaching nearly 13 million, and by another 25% in the first seven months of 2018, according to General Statistics Office of Vietnam data.

The upswing in tourism is seeing more attention directed to the country’s secondary destinations, which are now also seeing rapid growth in addition to the main cities of Ho Chi Minh and Hanoi. However, Bangkok Airways is not interested in large routes such as Bangkok-Ho Chi Minh and Bangkok-Hanoi, which are intensely competitive and served by several airlines including multiple LCCs. The carrier instead has always been interested in connecting Bangkok with niche secondary leisure destinations, following a regional full-service boutique airline model.

The airline relies heavily on codeshare and interline traffic to provide high yielding connecting passengers to its regional international and domestic routes. Bangkok Airways codeshares with nearly 30 airlines that serve Bangkok but generally do not serve secondary markets.

Bangkok Airways was the first airline to offer flights from Bangkok to Da Nang and Phu Quoc and from Chiang Mai to Hanoi. Thai AirAsia followed Bangkok Airways in launching Bangkok-Da Nang a year later but Bangkok Airways has continued to be successful in the Da Nang market – even as Thai AirAsia expanded to two daily frequencies for the current summer season.

Bangkok Airways offers an important link to Da Nang from Europe, where it has several partners. Bangkok Airways also works closely with several Middle Eastern carriers that are keen to grow its offline presence in increasing popular Southeast Asian destinations such as Da Nang and Phu Quoc.

Phu Quoc is a resort island that opened a new international airport in late 2012 and only had flights to China before Bangkok Airways entered. Phu Quoc also now has services to Seoul but Bangkok Airways provides the only connection to the west, offering convenient connections for visitors from South Asia, Europe and the Middle East.

Da Nang is a much bigger destination, famous for beaches and the nearby tourist town of Hoi An. However, Da Nang’s traditional connections were largely geared towards North Asia.

Nha Trang is another increasingly popular beach destination, located between Da Nang and Ho Chi Minh, that is mainly connected with North Asia. Nha Trang has never been linked with Bangkok, which will significantly improve connectivity to Western Europe, although Nha Trang does have a seasonal service from Moscow and has been served from Kuala Lumpur by AirAsia since Sep-2017.

Bangkok Airways president Puttipong Prasarttong-Osoth told CAPA TV in Jun-2018 the airline decided to launch Nha Trang have after conducting a survey and assessing the market. “It looks like they are really ready for tourists to come,” he said. “People know the place already and all the facilities are there.”

Capt Puttipong reconfirmed that as visitor numbers to Vietnam increase rapidly, several secondary destinations have put in place plans to accommodate and attract more tourists. “We have experience opening up destinations like Phu Quoc, which is now getting popular among Europeans”, he said, adding: “Vietnam is trying to develop, improve and be able to accommodate tourists between many, many destinations”.

Capt Puttipong concluded: “In past we only saw Hanoi and Ho Chi Minh. Now we are seeing some destinations getting stronger and also the infrastructure the government has put in those destinations. It answers the question why we want to go Vietnam”.