Vietstar licensing put on hold

Licensing of carrier must wait for completion of upgrades at HCMC's Tan Son Nhat Airport, PM decides.

Vietstar Airlines will have to wait until the construction of an additional passenger terminal and aprons at Tan Son Nhat International Airport are completed before receiving a business license.

Prime Minister Nguyen Xuan Phuc recently sent documents to the Ministry of Transport on the licensing of Vietstar Airlines to provide passenger and cargo services.

After consulting with ministries, the Prime Minister decided that the granting of a business license to Vietstar Airlines will be decided upon after the expansion of the passenger terminal and aprons, under a plan approved previously by the government.

As VET reported at the time, the government last year gave in principle approval for Vietstar Airlines to provide passenger and cargo services.

Mr. Pham Trinh Phuong, CEO of Vietstar Airlines, confirmed with Thoi bao Kinh te Vietnam, VET’s Vietnamese-language sister publication, that it had met all requirements relating to capital to provide passenger and cargo services and had received in principle approval and was waiting for final approval.

Vietstar Airlines was established in 2010 by the Ministry of Defense, with stakeholders including the Aircraft Repairing Company A41, the Vietnam Air Force, Vietstar Airways, and the Tin Thanh Express Company.

Once granted a business license, Vietstar Airlines would become the fifth carrier in Vietnam, joining Vietnam Airlines, Jetstar Pacific, Vietjet Air, and the Vietnam Air Services Co. (VASCO).

The six-year-old carrier, which currently has a fleet of five passenger aircraft and two cargo aircraft, including Boeing 737s and Airbus 320s, is expected to carry 500,000 passengers and transport 32,000 tons of cargo during its first year of operation.

It is expected to focus on domestic routes between northern and southern Vietnam as well as routes to northeast and southeast Asian countries.

AirAsia also recently announced its entry into Vietnam’s aviation market through an agreement with the Hanoi-based Gumin Co., Hai Au Aviation, and businessman Mr. Tran Trong Kien, CEO of the Thien Minh Group.

The venture, expected to begin flights in early 2018, will need investment of VND1 trillion ($44 million), with AirAsia contributing 30 per cent and Gumin around 70 per cent.

Vietnam’s aviation market grew 29 per cent last year, with passenger numbers reaching 52.2 million, the Civil Aviation Authority of Vietnam said. Low-cost carriers served 55 per cent of passengers on domestic trips.

by Quynh Nguyen / VET