Vietnamese low-cost airline Vietjet is preparing to take a major step into the Australian aviation market in a direct challenge to Qantas, Jetstar and Virgin Australia.
The airline has applied to the Civil Aviation Safety Authority (CASA) for an Australian Air Operator’s Certificate (AOC), allowing it to create an Australian subsidiary. The carrier reportedly wants to operate 10 Boeing 737 aircraft on major city routes across Australia.
If granted it could see one of the biggest challenges to Australia’s domestic aviation landscape in more than a decade and potentially increase competition on some of the nation’s busiest routes.
Vietjet has already built a growing presence in Australia, operating services connecting major cities including Sydney, Melbourne, Brisbane and Perth with Vietnam.
The airline has repeatedly expanded its Australian network as demand for travel between the two countries continues to grow.
The carrier’s low-cost business model, which focuses on affordable fares and high aircraft utilisation, could provide a direct challenge to Australia’s established domestic operators.
A new low-cost competitor could also put downward pressure on airfares, particularly on popular east coast routes such as Sydney–Melbourne, Brisbane–Melbourne and Sydney–Brisbane, where competition between airlines is already intense.
However, entering the Australian domestic market presents challenges. Airlines face high operating costs, airport charges, workforce expenses and strong competition from established brands with extensive frequent flyer programs and domestic networks.
The approval process is also a major hurdle for any new carrier, with CASA assessing an airline’s safety systems, aircraft operations, crew training, maintenance procedures and ability to meet Australia’s strict aviation standards before granting permission to fly.
Vietjet would also need to secure aircraft, crews, airport access and the necessary approvals before launching services.
The airline’s expansion plans come as Australia’s aviation sector continues to evolve, with carriers adjusting capacity and networks in response to changing passenger demand and rising costs.
The new Western Sydney International Airport is due to open later this year and could offer the Vietnamese carrier a potential base for its Aussie operations.
The potential arrival of Vietjet follows a period of renewed interest in Australian aviation competition after previous attempts by new airlines to break into the market struggled.
The collapse of budget carrier Bonza in 2024 highlighted the difficulties facing newcomers trying to establish a sustainable domestic network.
For Australian travellers, however, another major airline entering the market could mean more choice, more competition and potentially cheaper fares.
Vietjet has yet to confirm launch dates, routes or fleet plans for a possible Australian domestic operation, but the proposal signals the airline’s ambition to become a bigger player in the Asia-Pacific aviation market.
