Vietravel follows Bamboo Airways to establish its own airline

February 19, 2019 | 13:51

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After the official launch of Bamboo Airways, the local aviation market will see yet another new entrant with tourism company Vietravel Group, which made the first moves to establish its own airline.

vietravel follows bamboo airways to establish its own airline

Vietravel Airline would be headquartered in Thua Thien-Hue province

According to baogiaothong.vn, Vietravel Group sent the documents on establishing Viettravel Airline to the central province of Thua Thien-Hue’s Department of Transport. The headquarters of Viettravel’s airline is forecast to be in the province.

Similar to Bamboo Airways, Vietravel has to receive the government’s approval for its investment plan, after which it can carry out the following procedures in accordance with Decree No.92/2016/ND-CP stipulating investment conditions in aviation.

The newswire also stated that the Ministry of Transport (MoT) proposed eliminating the decree’s condition of “conforming to the government’s aviation development planning.” This means that investors should only need to meet the conditions pertaining to the scheme of ensuring the exploitation of planes, organisational structure, capital, business plan, and development strategy.

In addition, the minimum capital requirement to establish and operate an aviation business is proposed to be reduced to alleviate some of the burden on investors. According to the MoT’s proposal, the minimum capital to operate 10 airplanes should only be VND300 billion ($13 million), instead of the current VND700 billion ($30.43 million), while fleets of 11-30 airplanes would need VND700 billion ($30.43 million) instead of VND1 trillion ($43.47 million). These minimum capital requirements would not distinguish between local and international airlines.

After signing the memorandum of co-operation on last December 6 between Malaysia-based AirAsia and local tourism company Thien Minh Group, AirAsia’s managing director Tony Fernandes sent a letter to Prime Minister Nguyen Xuan Phuc to express interest in establishing a low-cost airline in Vietnam. This is the fourth time the foreign airline has attempted to enter Vietnam.

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By Van Anh

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