Aviation in 2026: Rising supply, volatile demand, and the market share question

With the participation of powerful private groups such as Sun PhuQuoc Airways and Vietravel Airlines, alongside the return of Bamboo Airways and the transformation of the national carrier, passengers are set to be the biggest beneficiaries, enjoying more diversified services and a route network broader than ever before.

The influx of massive aircraft fleets

The aviation industry is facing positive macroeconomic signals. Jet A1 fuel prices are easing (forecast at around USD 2.2 per gallon), helping airlines improve profit margins. International arrivals to Vietnam in 2026 are expected to reach 24 million, a sharp increase compared to 2025, reflecting the growing appeal of Vietnam as a tourism destination.

An increasing number of new airlines entering the market is making competition for market share increasingly intense.

However, the main “bottleneck” still lies in infrastructure. Although Tan Son Nhat’s Terminal T3 and Noi Bai’s Terminal T2 have come into operation, congestion pressure remains evident at key airports. The greatest expectations are now focused on the mega-project Long Thanh International Airport (Phase 1), which is scheduled to begin operations by the end of 2026 with a capacity of 25 million passengers per year. This project is widely seen as a major boost that could enable Vietnam to truly become a regional aviation hub, on par with Singapore and Thailand.

In order not to miss this opportunity, in the very first days of 2026 the domestic aviation market has already witnessed strong movements in fleet expansion. Vietjet Air surprised the market by taking in more than 20 new aircraft in less than a month—the largest fleet expansion in the history of the low-cost carrier. This move aims to reinforce its leading market share position (currently about 44%) and to support its strategy of expanding international routes to Australia, India, and Northeast Asia.

At the same time, newcomer Sun PhuQuoc Airways (SPA) also took delivery of its sixth Airbus A321. Despite having launched operations only in November 2025, SPA has already revealed its ambitions, setting a target of expanding its fleet to 20 aircraft in 2026 and 35 aircraft by 2027. The entry of SPA, together with Bamboo Airways’ return under its founding FLC Group—which is striving to reclaim its former glory with plans to add 8–10 aircraft per year—and Vietravel Airlines’ accelerated push toward a 30-aircraft fleet backed by capital from T&T Group, has created a new “multipolar” landscape for the aviation industry.

Over the past year, Vietnam Airlines has also advanced a project to invest in 50 narrow-body aircraft to expand its scale in the next phase, and plans to purchase or lease an additional 30 wide-body aircraft from Airbus or Boeing, with deliveries expected in the 2028–2032 period.

The emergence of newcomer Sun PhuQuoc Airways, together with the comeback of Bamboo Airways, is expected to make the aviation market in 2026 fiercely competitive.

According to analysts at MB Securities (MBS), competitive pressure in 2026 is expected to intensify sharply as fleet expansion outpaces passenger growth. The industry’s total aircraft fleet is forecast to surge by 18%, creating significant pressure on domestic market share.

In this context, a clear market differentiation is taking shape. The group of "giant" carriers (Vietnam Airlines, Vietjet) —are concentrating resources on long-haul and regional international routes to protect profit margins, while maintaining stability on their core domestic trunk routes.

Meanwhile, the “fast-rising” group (Sun PhuQuoc Airways, Bamboo Airways, and Vietravel Airlines) is engaging in fierce competition in the tourism segment and on so-called “hub-and-spoke” routes. This network model in logistics, aviation, or distribution uses a central hub to connect and coordinate the movement of passengers or cargo to multiple satellite destinations, optimizing costs and efficiency by channeling traffic through a central point rather than operating numerous point-to-point routes.

Competitive pressure and market share polarization

Looking ahead to the aviation industry’s outlook in 2026, analysis by VNDIRECT Securities suggests that the growth narrative remains intact, driven by a sustainable recovery in international travel, steady expansion of domestic demand, and improvements in infrastructure and input costs.

In terms of market structure, Vietnam’s aviation sector continues to be dominated by Vietnam Airlines and Vietjet Air, whose combined domestic market share exceeds 86%.

Experts note that the most distinctive feature of the 2026 market is the trend toward investment in integrated ecosystem models. Notably, analysts believe that Vietnam Airlines’ most formidable competitor over the next five years may not be Vietjet, but Sun PhuQuoc Airways (SPA).

SPA’s unique advantage lies in the fact that its parent company, Sun Group, is simultaneously an investor and operator of strategic airports such as Van Don, as well as the Phu Quoc Airport expansion project (valued at VND 22 trillion). Owning both the “wings” (aircraft) and the “runways” (airports) enables SPA to optimize operating costs and control tourist flows within its resort ecosystem.

Similarly, T&T Group is transforming Vietravel Airlines into a key link in a comprehensive logistics chain, connecting the Vietnam SuperPort mega-port in Vinh Phuc with airports in Quang Tri and Ca Mau. This strategy shifts the focus from pure passenger transport toward the highly promising air cargo segment.

While Sun PhuQuoc Airways, Bamboo Airways, and Vietravel Airlines are ambitiously expanding their fleets to complete domestic networks and move into international routes as early as 2026, the two major carriers—Vietnam Airlines and Vietjet—have concentrated on expanding their international route networks. In practice, the domestic resources and networks of these two airlines are already stable, accounting for roughly 90% of the domestic market. Over the past two years, Vietjet has added new routes to Northeast Asia, India, and Australia, while the national carrier has expanded its intercontinental services connecting Vietnam with Europe.

In the international segment, Vietnamese airlines currently hold around 40–45% of passenger transport market share, with Vietjet Air leading at 56%, well ahead of Vietnam Airlines at 42%. According to Sheldon Hee, there remains substantial room for growth for domestic carriers, as Vietnam currently operates direct flights to just over 30 countries, compared with more than 50 countries connected directly by Thailand and Singapore. At the same time, while some major markets such as Australia, Thailand, and Indonesia are slowing, Vietnam continues to post impressive growth.

In addition, Vietnam Airlines is reinforcing its position as the “national carrier” by investing in ground-handling infrastructure and large-scale maintenance, repair, and overhaul (MRO) centers at Long Thanh International Airport. The airline also plans to launch Vietnam’s first dedicated cargo airline in 2026, aiming to fill a gap in the country’s import–export logistics market.

According to experts, the race in 2026 will represent a process of natural “selection.” Airlines with strong financial capacity, well-developed supporting ecosystems, and flexible strategies balancing domestic and international operations will be the ones that endure and lead the market into a new era of growth.

Thanh Hoa