Vietnamese carriers exhaust rights to India amidst change in points of call

• India – Vietnam BASA allows 28 weekly frequencies from each side
• Vietnam Airlines & VietJet are operating 14 frequencies per week each to India
• VietJet is deploying A330s to India routes on some days

In July last year, Vietnamese carrier VietJet announced massive expansion to India which included an increase in frequencies and addition of flights to Bengaluru and Hyderabad. I was surprised with Bengaluru and Hyderabad additions, and reached out to my friends and former colleagues – who were equally puzzled since these two destinations did not feature in the points of call. The flights were open for sale only to close at the last minute leading to some very unhappy passengers. VietJet either overlooked the bilateral before opening the flights for sale or were sure of the changes coming in before the start of flights. 

A few days ago, the Ministry of Civil Aviation uploaded the points of call document on its website which started listing Bengaluru and Hyderabad as points of call for Vietnamese carriers while Chennai and Kolkata were dropped from the list. 

The market has grown by leaps and bounds and changed since non-stop service started in October 2019, with IndiGo being the launch carrier between the two countries. The connectivity suffered due to the pandemic and Vietnam was not part of the air bubble arrangement. The connectivity was back in April 2022, within a month of opening up of scheduled international services. While IndiGo reinstated its flights from Kolkata, albeit not daily, VietJet came in with a bang, announcing frequency additions as well as new points like Phu Quoc and Da Nang. This was followed by Vietnam Airlines joining in the party in June 2022.

Over the previous blogs, I had written about my apprehensions about the spread of VietJet as well as the capacity and timings of Vietnam Airlines. Both have come out to be true. Vietnam Airlines changed its afternoon departures and downgraded from the A350s to A320/A321 on its flights and VietJet has pulled out of Da Nang and Phu Quoc. Instead it is deploying the A330s on select dates to India! 

The reasons for cancellations of connectivity from Da Nang and Phu Quoc seems pretty obvious with all 28 weekly frequencies being consumed, with 14 each by Vietnam Airlines and VietJet. Interestingly, the Vietnamese carriers have adjusted their schedules so well that they do not compete with each other on the same day. The Indian side sees 14 frequencies per week, all operated by IndiGo and from Kolkata, with seven each to Hanoi and Ho Chi Minh City.

VietJet has once again opened flights for sale to Bengaluru and Hyderabad from Hanoi, Ho Chi Minh city and reinstated some flights to India from Da Nang, starting January 2024. The airline is either very sure of revision in bilateral rights by then or is repeating the same mistake it did earlier!

Updated Apr 12, 2023 – The airline has stopped the sale of flights from Bengaluru and Hyderabad.

Current operations, Vietnam the new transit point?

No room left for expansion to Bengaluru or Hyderabad or from Da Nang/ Phu Quoc till bilateral rights are revised.

The airline also operates to Ahmedabad from Hanoi and Ho Chi Minh city but Ahmedabad is part of the 18 points of call which are part of open skies, open for all carriers from ASEAN. Going by the expansion of VietJet, I won’t be surprised if the airline decides to add another point (or two) from the 18 destinations for which it has access. Which would those be? I would guess it would be Amritsar / Lucknow.

Timing timing timing

When IndiGo launched the flights, it had a mid day departure from Kolkata. It was timed for two way connectivity to the religious tourism circuit. Within a few months, the airline changed the flight timings by rejigging the entire Kolkata hub. With the yields not in public domain, one can at best speculate based on the prices on offer and limited data on passenger numbers.

VietJet operated with timings identical to that of how AirAsia group operates to India and Vietnam Airlines also moved to these timings. This gives opportunity for both the airlines to connect to Bali and some other points in Japan, South Korea and Indonesia. Both airlines are also looking to expand in Australia which would see more connections coming online.

What would I expect from IndiGo?

The change in points of call for Vietnamese carriers will mean that Kolkata will be exclusive for IndiGo, unless another Indian carrier joins in. 

IndiGo’s timings are also largely centred around connectivity ex- Kolkata to domestic and international destinations but are largely not very friendly towards tourist preferences. Will IndiGo expand from Delhi and Mumbai and take on the Vietnamese carriers or will it look for Bengaluru / Hyderabad / Chennai where it won’t have to face Vietnamese carriers? 

The National Civil Aviation Policy of 2016 talks about renegotiating bilaterals when both sides reach 80% utilisation. Currently it stands at 50% from the Indian side, another seven flights would make it 75%, still below the renegotiation threshold. The threshold has rarely been utilised in the true sense in the past.

If I have known IndiGo well, it goes in for the second mover advantage – beating the competition after the market has stabilised. I would bet on Delhi, with a bank which will connect possibly to Moscow, CIS and Turkey. The airline has no presence in Russian or CIS right now. 

A change in bilateral, how?

India and Vietnam enjoy strong bilateral relations with focus on defence and geo-political issues. The trade has been increasing rapidly and so is tourism with a relatively liberal visa regime for Indians.

While Dubai and Qatar battle it out for increase in seats, Vietnam had already had a smooth sailing with change in points of call and who knows the frequency increase could come in soon as well, paving the way for more flights to more destinations in India by the Vietnamese carriers.

For the Vietnamese, the existing deployment ensures that Bamboo airways is out of this market but with 14 frequencies a week available, IndiGo could still see competition from the Air India group when it gets additional planes. What has happened with the bilateral rights and what happens to the flights to Bengaluru and Hyderabad? Keep watching this space!

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