Ministry turns down plan for new airline

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Báo Dân Trí English - 86 month(s) ago 12 readings

Ministry turns down plan for new airline

The Ministry of Transport has supported the national aviation authority’s proposal not to pass a plan involving Vietnam Airlines and its partners to establish an aviation joint-stock company serving businesspeople, saying that licensing a new carrier should follow a previously-announced road map.

Vietnam Airlines planes park at a local airport in a file photo.

Vo Huy Cuong at the Civil Aviation Administration of Vietnam (CAAV) told the Daily that the ministry had told this agency to inform would-be founders of the planned airline called VNJet that licensing a civil aviation carrier would not be considered after 2011.

The director of CAAV’s Air Transport Department said the ministry wanted establishment of VietAir, which is an airline that Vietnam Airlines and its partners plan, to proceed in accordance with the Government’s instruction.

“This is what the ministry clarifies in its written document just sent to CAAV,” Cuong said.

In late November last year, CAAV received the VNJet plan mapped out by Vietnam Airlines, Hanoi Import Export Joint-Stock Co. and the finance investment joint stock company An Binh.

The new airline is expected to use short-haul aircraft to offer chartered flights to businesspeople, and have a chartered capital of VND50 billion (over US$2.56 million) with around 20% of which contributed by Vietnam Airlines.

However, CAAV had asked the ministry not to approve the VNJet establishment because this agency wanted Vietnam Airlines to concentrate resources on the plan for VietAir based on restructuring of Vietnam Air Service Co. (Vasco) under Vietnam Airlines Corp.

Vietnam Airlines and its partners planned the airline start-up for businesspeople and then develop this carrier together with the merger of Vasco into VietAir. But, this is not what Vietnam Airlines had reported to the Government on the VietAir establishment in 2009.

Work is still in a preparatory process for the joint-stock airline VietAir, and this carrier is planned to have chartered capital of some VND1 trillion (around US$51.3 million). VietAir will be able to operate Airbus 320s, ATR72s and Fokkers for domestic short-haul services before expanding its network to overseas markets.

Vietnam’s Civil Aviation Law requires companies to submit their applications for new airline set-ups to CAAV and this agency will forward lawful dossiers to the ministry, and this ministry will license a new airline upon approval from the Prime Minister.

CAAV said it took a maximum of 65 days for an application to be screened and approved. A commercial passenger airline should have chartered capital of at least VND200 billion (US$10.2 million) for domestic flights and at least VND500 billion for international operations.

The ministry has licensed five private passenger and cargo airlines, namely VietJet Air, Indochina Airlines, Air Mekong, Trai Thien Air Cargo and Blue Sky Air, but only Air Mekong currently conducts flights.

Other local operational airlines are Vietnam Airlines and Vasco, and Vietnam’s budget carrier Jetstar Pacific.

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