Budget airline VietJet plans to launch domestic Australian flights in a move that could challenge Qantas and Virgin

By SARAH BROOKES - SENIOR REPORTER, AUSTRALIA Published: 02:00, 30 June 2026 | Updated: 02:01, 30 June 2026 Qantas and Virgin could face a major new challenger, with Vietnamese budget airline VietJet eyeing Australia's domestic market in a move that could spark an airfare war.  Budget carrier VietJet has applied to the Civil Aviation Safety Authority (CASA) for permission to offer flights within Australia. It would see the airline operate up to 10 Boeing 737 aircraft within Australia. VietJet currently provides direct services between Ho Chi Minh City and Sydney, Melbourne, Brisbane, Perth and Adelaide. If approved, VietJet would become the first international airline in more than a decade to directly challenge the dominance of Qantas and Virgin in the domestic market. Aviation analyst Peter Harbison said the airline was fundamentally different from previous challengers, like Rex, OzJet, and Air Australia. 'The big difference here is it's a well-established airline, it's got very substantial financial backing, and secondly it's also an international airline that knows the Australian market very well,' he told Nine. 'It would transform the market, no doubt about it.' Budget carrier VietJet (pictured) has applied to the Civil Aviation Safety Authority for permission to operate flights within Australia Aviation commentator Peter Harbison (pictured) said there was no doubt, if approved, VietJet would transform the market  VietJet already runs domestic airline operations in Thailand and Kazakhstan (Pictured, an image of a VietJet flight to Thailand) The proposed expansion comes as Western Sydney Airport prepares to open in October, potentially providing a new gateway for airlines looking to break into the tightly contested domestic market.  Mr Harbison said this could prove crucial to the airline's chances of success.  'The thing that would make it possible, whereas other airlines haven't been able to make a go of it, is that now there are plenty of slots or should be plenty of slots available at the new Western Sydney airport,' he said. CASA typically takes around six months to assess applications from airlines seeking approval to operate in Australia. VietJet already runs domestic airline operations in Thailand and Kazakhstan, giving it experience managing low-cost networks outside its home market. Australia's aviation sector has proved difficult for would-be challengers since Ansett collapsed in 2001. Impulse was absorbed into Qantas and rebranded as Jetstar, while carriers including OzJet, Air Australia, Tigerair Australia and Bonza all ultimately failed.  Regional carrier Rex also attempted to take on Qantas and Virgin on major city routes before retreating and later collapsing.  The comments below have not been moderated. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.