Founded in 2011, the Vietnamese budget airline has captured 40% of the domestic market.
Vietjet Air has achieved brand recognition with one of the crudest marketing ploys in business: using scantily clad women to attract attention. Its stewardesses have worn bikinis on some flights, and the airline publishes calendars of models wearing lingerie in the company’s colors, red and yellow. The criticism that inevitably follows only helps to promote the brand even more.
But behind the gimmicks is a fast-growing and savvy young airline. Since its first commercial flight in December 2011, Vietjet has become Vietnam’s second-largest airline, accounting for more than 40% of the domestic market share, and it has carried some 50 million passengers. This rapid growth has made founder Nguyen Thi Phuong Thao, 47, Vietnam’s first female billionaire.
It helps that Vietnam’s rising middle class is traveling more — the number of domestic passengers grew at a rate of 17.2% between 2011 and 2016, among the highest in the region. But Thao also runs a tight ship. Vietjet is a classic budget carrier, emphasizing high seat density, clever aircraft utilization, labor productivity and low maintenance costs. It is a formula that has enabled Vietjet to surpass its peers in the hypercompetitive Southeast Asian market, according to an aviation report from VinaCapital. Vietjet’s group revenue for 2017 is expected to reach 42 trillion dong ($1.84 billion), up 53% on the year, and net profit is seen reaching 3.8 trillion dong, up 56%.
The airline plans to expand its network across the Asia-Pacific region over the next five years, and it has signed agreements with leading global aircraft manufacturers to purchase more new aircraft to fulfill its goals. Already, Vietjet has a modern fleet with an average age of just 3.3 years, among the youngest in the world.
Vietjet “is a rising star in the industry, and the airline will still enjoy the incentives of the Vietnamese government in the next few years,” Andy Ho, managing director and chief investment officer at VinaCapital, told NAR.
Thao is not the only powerful woman at Vietjet, however. Nguyen Thanh Ha, 67, a veteran of Vietnam’s aviation authority, is the company’s chairwoman. Her long experience may explain how Vietjet managed to become such a successful competitor to Vietnam Airlines as others went bankrupt (Indochina Airlines), were acquired (Pacific Airlines) or suspended (Air Mekong) during the last decade.
Back in the USSR
Thao was born in Hanoi and attended university in the Soviet Union, studying finance, banking and economics when she was 17 years old. She met her husband and established Sovico Holdings in Russia in the 1990s. After receiving a doctorate in economics at 27, Thao began investing in four sectors in Vietnam: finance, aviation, real estate and industry.
For most of that time, she kept a low public profile, but she has become more prominent in the media after Vietjet’s listing on the stock market in February 2017. She appeared at the APEC 2017 Summit in November, where the majority of the events were held at one of her assets in the central city of Danang.
Even as she has attracted criticism for her airline’s portrayal of women in ads, Thao has pledged to take “real action” to support women in business in Vietnam.
Founded in 2011, the Vietnamese budget airline has captured 40% of the domestic market
“In any company or office, when they are searching for a leader, they think of a man first, and tend to search for a man before a woman,” she told NAR in 2016. “So in order to change that, we have to set a target — for example, in Vietjet, we set up a certain percent for women in managing positions.” She added that Vietjet has set targets for placing women in engineering and pilot jobs.
“We encourage women to be confident to step into the pilot training program,” she said.
Reported by Kim Dung Tong in Ho Chi Minh City