VietJet has reportedly taken the initial regulatory steps toward establishing a carrier in Australia to take on the powerful incumbents on domestic routes.

There have been rumors about VietJet’s interest in an Australian startup for some time, and the Australian Financial Review reported on June 29 that VietJet has applied to Australian regulators for an air operator’s certificate (AOC).

When contacted by Aviation Week about whether VietJet has applied for an AOC, the Australian Civil Aviation Safety Authority (CASA) said it does not comment on airlines’ commercial plans. VietJet could not be reached for comment. However, industry sources confirmed that the report is accurate.

Previously, the Analytic Flyer website reported that an unnamed airline had been allocated slots at Sydney Airport for the upcoming northern winter season. This airline is now known to be VietJet.

The startup would still need an AOC before using any of the slot allocations. CASA typically takes 6-12 months to consider an AOC application, assessing technical and safety factors as well as financial viability.

Unlike many other countries, Australia has very liberal ownership laws allowing foreign entities to set up and own carriers for domestic operations.

According to the Australian Financial Review report, VietJet proposes starting with 10 Boeing 737s. The Sydney slots it has been allocated would be sufficient for seven daily return services using 737s, according to Analytic Flyer.

VietJet has 188 Airbus narrowbodies on order, as well as 151 Boeing narrowbodies. The carrier has previously allocated another 50 Boeing narrowbody orders to its Thai VietJet subsidiary, with 39 remaining to be delivered. VietJet also has a subsidiary in Kazakhstan.

VietJet already operates international services from Vietnam to Australian destinations Brisbane, Melbourne, Perth and Sydney.

There are two more proposed startups in the Australian market—Zinc and Koala Airlines. However, their launch timelines are unclear.