SINGAPORE—Vietnam Airlines’ low-cost subsidiary Pacific Airlines, previously known as Jetstar Pacific, has suspended commercial service.

In a statement, Pacific Airlines said that it is “currently restructuring its fleet and route network to ensure and enhance operational efficiency” and some routes and flights will be suspended.

Local news outlet VNExpress reported that Pacific Airlines has returned all of its aircraft to lessors after failing to keep up with payments.

Pacific Airlines said it is now working with Vietnam Airlines to lease new aircraft and "optimize resources," such as sharing check-in counters and ground service vehicles.

Affected passengers will be redirected to parent Vietnam Airlines’ flights. 

CAPA – Centre for Aviation and OAG Schedules Analyser data shows Pacific Airlines' only route at present is Ho Chi Minh City-Singapore.

The Aviation Week Network Fleet Discovery database shows that Pacific Airlines was leasing eight Airbus A320s. Six of those belong to Aviation Capital Group, with China Aircraft Leasing and Horizon Aircraft Leasing owning the other two. Leases for three of those A320s were contracted to run until 2029.

Vietnam Airlines bought Qantas' minority stake in Jetstar Pacific in 2022, taking its ownership share in the carrier to 98.8%. Following that transaction, the LCC was renamed Pacific Airlines.

Despite being in one of the fastest-growing aviation markets in Southeast Asia, Pacific Airlines has been up against market leader Vietjet Air and has also been faced with a price cap imposed by the Transport Ministry. 

The cap was revised upward by 5% in March 2024. Airlines are allowed to sell fares for at most VND1.6 million ($68.7) for domestic routes below 500 km (310 mi.) per one-way ticket and VND1.7 million for other routes, making the local airline industry fiercely competitive with low yields.