Published on : Tuesday, October 23, 2018
Japan is already the carrier’s largest market, making up more than 20% of its sales. Last year, 631,120 passengers used the airline to fly to Vietnam from Japan, up 11% from 2016.
The company aims to capture strong demand for both business travel and tourism, Vu Nguyen Khoi, general manager of the airline’s Japan operations said.
Japan’s Ministry of Justice said that the Vietnamese arrivals has increased by 31% in 2017 at 323,451 from a year ago. This was in part due to a new rule that allows Vietnamese to apply for visas to Japan at travel agencies rather than only from the embassy or consulate offices.
Vietnam Airlines will offer a daily service on a new route between Danang, in central Vietnam, and Kansai International Airport, near Osaka. Danang is a well-known resort destination, with easy access to the World Heritage sites of Hoi An and Hue. This will be the second route connecting Danang with Japan, after one to Narita Airport, the Tokyo-area gateway.
Vietnam Airlines sees the Danang routes as valuable also because the city has become a venue for international conferences, including last year’s Asia-Pacific Economic Cooperation meetings. Khoi said the carrier expects more demand on the routes from business travelers, including from the auto industry in the future.
An existing route linking Hanoi and Fukuoka, the largest city in Japan’s southern Kyushu region, will operate daily, up from four days a week. This is largely to meet growing demand from schools in Kyushu: Vietnam is a popular destination for class trips.
The capacity on a Hanoi-Nagoya route, which flies daily, will be increased using Boeing 787s four days a week. The midsize, long-range aircraft will be configured with 100 more seats than current flights. Vietnam Airlines handles about 60% of all flights between the two countries, according to the company. But increased competition could eat into that figure.
Viet jet Air is the country’s fastest-growing low-cost carrier and gaining more domestic market share from Vietnam Airlines. It intends to launch a Hanoi-Narita route in January. Low-cost carriers pose “a challenge” for Vietnam Airlines, Khoi said, adding that some routes might face “overcapacity.” The company’s answer, he suggested, will be to “improve our service.” The competition has become intense as it involves Japanese airlines as well.
ANA Holdings has 28 flights connecting the two countries including a codeshare with Vietnam Airlines. ANA purchased an 8.8% stake in Vietnam Airlines for $108 million in 2016, although Vietnam’s flagship carrier already had a codeshare deal with ANA’s rival Japan Airlines. On the other hand, JAL operates six flights between Japan and Vietnam. After the dissolution of the partnership with Vietnam Airlines, it formed a new partnership with Vietjet in July 2017 and the two are working on a potential codeshare.
Tokyo has ramped up efforts to attract more foreign workers. As of the end of June, there were more than 290,000 Vietnamese residents in Japan, the third-largest group of foreigners behind China and South Korea. ANA and JAL are hoping to attract not only tourists to Japan but also to North America, using Japanese airports as stopovers.