Vietnam loosens regulations on new airlines

Vietnam has lowered the minimum capital requirement and increased the foreign ownership cap for the establishment of new carriers. 
November 19, 2019 | 11:20
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Aircraft seen in Tan Son Nhat International Airport, Ho Chi Minh City. Photo by Shutterstock/Phuong D. Nguyen.

The minimum capital needed to establish an international airline in the country has been lowered from VND700 billion ($30.3 million) to VND300 billion ($13 million) for airlines with 10 aircraft or less, according to a new decree signed by Prime Minister Nguyen Xuan Phuc.

For airlines with 11-30 aircraft, the minimum capital requirement has been lowered from VND1 trillion ($43.2 million) to VND600 billion ($25.9 million); and for over 30 aircraft, from VND1.3 trillion ($56.2 million) to VND700 billion ($30.3 million).

The decree will take effect on January 1, 2020.

It also increases foreign ownership cap in a domestic airline from 30 percent to 34 percent, but there must be at least one Vietnamese inpidual or company holding a majority stake.

The government has also removed certain restrictions on aircraft age. Formerly, airlines were only allowed to import aircraft 10-years-old or less (counting from manufacturing date), and to operate aircraft that were 20 years old or less. These decree lifts these restrictions.

Vietnam now has six domestic carriers: Vietnam Airlines, Vietjet, Jetstar Pacific, Vietnam Air Services Company (VASCO), Bamboo Airways, and newly-licensed Vietstar Airlines, a military-run company.

Hospitality group Thien Minh’s KiteAir, tourism firm Vietravel’s Vietravel Airlines and business conglomerate Vingroup’s Vinpearl Air are vying to be the seventh national carrier.

Last year, Vietnam’s 21 state-run airports served 103.5 million passengers, up 11 percent year-on-year, and the figure is set to rise to 112 million this year, according to the Airports Corporation of Vietnam.

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