Vietnam Airlines Group forecasts that its international share of traffic into Vietnam will slide a little by 2020, but it intends to maintain it above 30%, airline executives tell ATW’s sister publication Aviation Daily.

The group, which includes Vietnam flag carrier Vietnam Airlines and subsidiary Jetstar Pacific, holds a share of 35% of the international market. This makes it the largest player, despite the presence of more than 50 foreign carriers flying into Vietnam.

In the domestic market, the Vietnam Airlines Group holds a 59% share. The parent carrier accounts for a 44% share if Jetstar Pacific and regional subsidiary VASCO are excluded.

The Vietnamese market has seen a major influx of LCCs in recent years, which has had a particularly significant effect in the domestic arena. Domestic passengers carried by all airlines increased by 20%-30% per year between 2014 and 2016, although growth slowed to 11%-13% in 2017.

International passenger numbers in Vietnam were up 12% in 2017. LCCs now comprise almost 35% of Vietnam’s international market, according to estimates from Vietnam Airlines.

The Vietnam Airlines group intends to increase its own capacity growth in the next few years. Its combined capacity—including international and domestic—was up 6.9% in 2017. The group is aiming for an increase of 11% per year in the 2018-2020 period.

Connecting passengers comprise just 15% of Vietnam Airlines’ overall traffic, a relatively low share compared to other major carriers in the Southeast Asian region. The airline plans to keep its focus on building point-to-point traffic over the next five years rather than increasing connecting traffic.

After a partial privatization, the Vietnamese government has reduced its ownership stake in Vietnam Airlines to 86.2%. It aims to reduce its holding to 51% by 2020. Vietnam Airlines intends to list its shares on the Ho Chi Minh City open stock exchange during the second quarter of this year.

Adrian Schofield,