Vietnam Air plans domestic carrier as budget rival gains ground

Vietnam Airlines plans to split off a domestic-service unit to create a short-haul carrier as it loses ground to a low-cost rival. The new airline would be formed by restructuring Vietnam Air Services, known as Vasco, Pham Ngoc Minh, CE of the carrier, said Tuesday. Vietnam Air is in the midst of seeking approval from the transport ministry for the new carrier aimed at business travellers, Minh said. The move comes amid market-share gains by VietJet Aviation, which CAPA says will probably surpass Vietnam Airlines as the nation’s biggest domestic carrier this year. Vietnam is expected to rank among the world’s 10 fastest-growing aviation markets in the next 2 decades, according to IATA. Under the proposal, Vietnam Airlines would hold 51% of the venture, while Techcombank would have a 49% stake. <br/>