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Pacific Airlines Temporarily Halts Operations Amid Fleet and Network Restructuring

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Pacific Airlines, a budget carrier subsidiary of Vietnam Airlines formerly known as Jetstar Pacific, has announced a temporary cessation of its commercial operations. According to a statement from the airline, the suspension is part of a strategic move to “restructure its fleet and route network to ensure and enhance operational efficiency.” The decision entails a temporary halt on certain routes and flights.

VNExpress, a local news outlet, has reported that Pacific Airlines has relinquished all of its aircraft back to lessors due to financial difficulties in maintaining payment schedules. In response to these challenges, the airline disclosed its collaboration with Vietnam Airlines to lease new aircraft and “optimize resources.” This partnership includes shared logistics such as check-in counters and ground service equipment, aiming to streamline operations.

Passengers affected by the service suspension are being accommodated on flights operated by Vietnam Airlines, ensuring minimal disruption to travel plans. Currently, Pacific Airlines maintains a singular route between Ho Chi Minh City and Singapore, as indicated by data from CAPA – Centre for Aviation and OAG Schedules Analyser.

Fleet Analysis: Pacific Airlines' Leased Airbus A320s

The Aviation Week Network Fleet Discovery database reveals that prior to the suspension, Pacific Airlines was leasing eight Airbus A320 aircraft. The fleet included six planes from Aviation Capital Group and one each from China Aircraft Leasing and Horizon Aircraft Leasing. Notably, leases for three of these A320 aircraft were contracted to extend until 2029.

In a significant move in 2022, Vietnam Airlines acquired Qantas’ minority stake in the low-cost carrier, elevating its ownership to 98.8% and subsequently rebranding it to Pacific Airlines. This acquisition marked a strategic effort to strengthen its position in Southeast Asia’s rapidly expanding aviation market.

Aircraft Returns Prompted by Financial Hurdles at Pacific Airlines

Despite the growth potential, Pacific Airlines has encountered formidable competition from market leader Vietjet Air, further compounded by regulatory challenges. The Transport Ministry’s imposition of a price cap has intensified the competitive landscape, limiting fare flexibility. In March 2024, the cap was adjusted upwards by 5%, setting fare ceilings at VND1.6 million ($68.7) for one-way domestic tickets on routes shorter than 500 km (310 mi.) and VND1.7 million for longer routes. This regulatory environment has contributed to a highly competitive market with low profit margins for carriers.