Capital requirements drafted for new airlines

June 27, 2016 | 14:43
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The Ministry of Transport has submitted a draft decree on conditional business lines. According to the draft, a new airline must have capital of at least VND100 billion (US$4.66 million).

Under the draft, if the airline registers one to 10 airplanes, investors will have to guarantee charter capital of at least VND700 billion for international services and VND300 billion for domestic services.

If the airline registers 10 to 30 aircraft, investors are required to guarantee at least VND1 trillion for international flights and VND600 for domestic flights.

New airlines registering more than 30 aircraft will have to secure at least VND1.3 trillion for international flights and VND700 billion for domestic flights.

The draft stipulates that for foreign-invested businesses in aviation, foreign ownership is not allowed to exceed 30% of the charter capital, while Vietnamese individuals or investors are not permitted to hold more than 49% of charter capital. If they want to sell their shares to foreign investors, it can be done after two years since the date of issuing the business licence for aviation.

The draft decree also sets out the principles and responsibility of agencies and units to manage, plan and operate airports.

The draft offers two business methods. The first method requires that the minimum capital for establishing and maintaining the operation of airport enterprises that provide aviation service is VND100 billion for domestic airports and VND200 billion for international airports.

Foreign ownership is not allowed to exceed 30% in companies that manage passenger terminals, goods terminals, gas and oil supply, as well as ground commercial technical services. Airlines are not allowed to own more than 30% of charter capital in airport enterprises and enterprises that manage passenger and goods terminals.

The second method requires that companies that manage apron areas, news services, navigation aid and supervision, as well as weather observation, must be at least 65% State-owned.

Minister of Transport Truong Quang Nghia said the draft regulation on the charter capital ratio was adapted according to the equitisation plan for the Airports Corporation of Vietnam (ACV), which was approved by the government.

ACV, which operates airports across Vietnam, is allowed to sell part of the State’s stake in the corporation and issue more shares to increase its charter capital.


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