Kite Air to stay landbound

Tran Trong Minh, chairman of Thien Minh Group's Kite Air

In Document No.5568/BKHDT-GSTDDT submitted to the prime minister this week, the Ministry of Planning and Investment (MPI) proposed to halt the process of granting Kite Air in-principle approval.

Previously, in Document No. 5833/VPCP-CN dated July 17, Deputy Prime Minister Trinh Dinh Dung agreed in-principle to the establishment of Kite Air after the market recovers (expected by 2022). The deputy prime minister emphasised that the Ministry of Transport (MoT) should carefully consider the impact of Kite Air's operation on the sustainability of the aviation sector.

He also asked the MPI, which appraised the in-principle approval of Kite Air, to report to the government based on Document No.4620/BGTVT-VT of the MoT.

In mid-April, Prime Minister Nguyen Xuan Phuc reminded the MoT to limit the establishment of new airlines amidst the pandemic to ensure sufficient state management and the sustainable development of the sector.

In the opinion of the MoT, the Kite Air project aligns with the master plan on aviation outlined in Decision No.236/QD-TTg. With the scale of six ATR72 aircraft, the project of Thien Minh Group is expected to be a godsend for airports which cannot accommodate planes the size of Airbus 320/321.

The five cities and provinces of Can Tho, Kien Giang, Dien Bien, Ca Mau, and Ba Ria-Vung Tau – which need more frequent flights and can only accommodate aircraft the size of ATR72 – have expressed support for the formation of Kite Air.

However, according to the Civil Aviation Authority of Vietnam, COVID-19 has had a remarkable dampening effect on the growth of Vietnam and global aviation. The authority forecast total market volume to reach 42.7 million arrivals, down 46 per cent on-year.

Thereby, the MoT proposed helping to recover the market and remove obstacles for Vietnamese airlines. “The establishment of new airlines like Kite Air will be considered after the recovery of the aviation market,” he stated.

Kite Air will be a low-cost airline with the charter capital of VND1 trillion ($43.5 million) to exploit domestic flights. In the first year after launching, Kite Air will operate six ATR72 aircraft from Chu Lai and Danang airports. By the fifth year of its operation, Kite Air's fleet will increase to 30, including 15 ATR72 and 15 Airbus 320/321.