VietJet Moves To Launch Budget Airline In Australia
VietJet put bikinis on its flight attendants. Australia, hide your budgie smugglers.
It seems everyone wants a piece of the Australian aviation sector. New reports suggest popular Vietnamese budget airline VietJet is plotting an Australian subsidiary, a move that could finally deliver a genuine challenger to the long-entrenched Qantas and Virgin Australia duopoly. The news arrives as prospective carriers Koala Airlines and Zinc Airlines also battle for attention, raising hopes that Australia's famously uncompetitive skies may be on the cusp of change.
VietJet is no stranger to bold expansion. The airline has already launched subsidiaries in Thailand and Kazakhstan, and has built a reputation for dirt-cheap fares and aggressive growth since its first flight in 2011. It is perhaps better known to some as the "Bikini Airline", a nickname earned through viral marketing campaigns with flight attendants wearing bikinis on inaugural flights.
The Vietnamese carrier already serves Australia from overseas, operating routes from Ho Chi Minh City to Sydney, Melbourne, Brisbane, and Perth with Airbus A330 jets. VietJet deploys one of the more cramped configurations of the type, with nine seats squeezed in per row instead of the typical eight.
According to an anonymous source cited by the AFR, VietJet is in talks with the Civil Aviation Safety Authority to obtain an air operator certificate in Australia. This is the regulatory certification VietJet would need to begin domestic flying in Australia. The airline is said to be planning to launch Australian operations with a fleet of ten Boeing 737 aircraft.
VietJet Allocated Slots At Sydney Airport?
The federal government has confirmed a mystery new entrant is eyeing Sydney Kingsford Smith Airport, acknowledging that an unnamed airline has formally requested take-off and landing slots. The identity of the carrier remains undisclosed, but the clues are hiding in plain sight.
Airports Coordination Limited, which took over as Sydney Airport's slot manager earlier this year, has already allocated 2,252 slots for the 26/27 Northern Winter season to an operator listed as "Blank" with the placeholder IATA designator YY. That scheduling window runs from 25 October 2026 to 27 March 2027, so whoever sits behind that anonymous listing has wasted no time staking out a significant presence at Australia's most notoriously slot-constrained airport.
Reports are circulating that this mystery airline is VietJet, with the numbers doing little to dispel that theory. The 2,252 slots translate to 1,126 return flights across the 153-day season, or roughly seven daily return services. Paired with a seat allocation of 425,628 for the same period, that works out to almost exactly 189 seats per flight — the precise maximum certified capacity of a Boeing 737-800.
What's more, VietJet's Thai subsidiary currently operates a fleet of 737 MAX 8 jets in an identical 189-seat configuration, and the broader VietJet group holds a firm order for 200 MAX family aircraft. With that many jets on order, finding flying for a ten-aircraft Australian operation is hardly a stretch.
VietJet Australia Is A Win For Wallets
If VietJet proceeds, it would be the first international airline to compete directly on Australian domestic routes in more than a decade. The last to try was Tiger Air, which launched in 2007 as a subsidiary of Singapore Airlines, before being acquired by Virgin Australia in two stages, with the final 40% purchased for just $1 in 2014.
It has previously been a struggle for those who dared challenge the Qantas-Virgin duopoly. Rex staked its future on capital city routes and lost, collapsing into administration before being acquired by American logistics company Air T.
The ACCC found that after Rex stopped flying its 11 capital city routes, airfares on those same routes jumped 13.3% by September 2024. That price increase came as, in the 12 months prior, jet fuel prices fell by 41%.
The ACCC also found that the average cheapest economy tickets had increased dramatically on routes formerly serviced by Rex. Best discount fares increased by 95% on Melbourne to Adelaide, 70% on Melbourne to the Gold Coast, and 54% on Canberra to Melbourne.
Bonza, a venture-backed low-cost carrier, fared even worse than Rex, flying for just over a year and leaving creditors owed $168 million. Yet it was Bonza's demise that appears to have first put Australia on VietJet's radar. When the carrier collapsed in 2024, it was reported that VietJet had explored acquiring Bonza's air operator certificate, the same regulatory instrument it is now seeking independently.
For Jetstar in particular, the absence of competition has proven enormously profitable. Jetstar's domestic earnings jumped 53.7% to $269 million in the first half of the 2024-25 financial year, compared to the previous period. Growth the ACCC directly attributed to the carrier's ability to capitalise on the absence of competitive pressure from another low-cost airline.
It is precisely this environment of high fares, captive passengers, and emboldened incumbents that VietJet is now betting it can disrupt.
Summing Up: My Take
Many Australians would agree we need more competition in our skies. But whether VietJet Australia can get off the ground is another matter. Australia has become a graveyard for aviation ambition, claiming Tigerair, Bonza, and Rex in the space of a decade, with many more before them.
