CAAV says VietAir formation in progress

The Civil Aviation Administration of Vietnam (CAAV) has yet to receive a full application for VietAir as stakeholders are still preparing a project to establish this joint-stock airline company.

The aviation authority told the Daily that Vietnam Airlines Corp. was mapping out a project for VietAir after the Government approved the flagship carrier’s proposal for the joint-stock airline because of changes to shareholders.

Document 1347/VPCP-KTN, Deputy Prime Minister Hoang Trung Hai endorsed Vietnam Airlines’ new proposal and ordered that Vietnam Airlines consider the role of Vietnam Aircraft Leasing Co. (VALC) in the formation of VietAir in the project before submitting it to the Prime Minister for consideration.

Vietnam Airlines, the Bank for Investment and Development of Vietnam and other state-run corporations are important stakeholders of VALC, which started operations in October of 2007.

So far, VALC has clinched contracts worth US$2.5 billion to buy Boeing, Airbus and ATR planes including eight B787-8 Dreamliners and 10 A321-200s. The company will lease these aircraft to Vietnam Airlines.

The Government now wants VALC to be one of the stakeholders of VietAir, a joint-stock airline that will be set up to help Vietnam Airlines expand its operations, possibly with helicopters and small-aircraft services for VIPs, a market which has long been left unattended to.

The document says Vietnam Airlines is allowed to offer more aviation services if it can run the new business scopes efficiently. This document was issued earlier this month after Vietnam Airlines submitted to the Prime Minister a report on VietAir in line with a master plan to develop the country’s aviation industry until 2020 with a vision to 2030 as required by the Government.

Vietnam Airlines Corp. proposed the establishment of VietAir to the Government in October. But PetroVietnam Insurance Joint Stock Corp. unveiled the plan for this airline more than two years ago, a plan to join with partners to set up VietAir, whose chartered capital could be VND1-1.2 trillion (over US$52.4 million).

Vietnam Airlines is working with other stakeholders to identify the aviation areas in which VietAir will operate when it is in place in the market, according to CAAV.

Vietnam Airlines chairman Nguyen Sy Hung told Tuoi Tre that VietAir would be formed from the restructuring of Vietnam Air Services Co. (Vasco) under the umbrella of the national carrier.

Hung did not say when VietAir would be in the country’s aviation market but said this carrier would operate Airbus 320s, ATR72s and Fokkers for domestic short-haul services before expanding its network to overseas markets.

he Civil Aviation Law requires investors to submit their applications for new airline set-ups to CAAV and this agency will forward lawful dossiers to the Transport Ministry. This ministry will license a new airline upon approval from the Prime Minister.

It takes a maximum of 65 days for an application to be approved. A commercial passenger airline should have chartered capital of at least VND200 billion (over US$10 million) for domestic flights and VND500 billion or more for international operations.

In addition to Vietnam Airlines and Vasco, domestic flights are also operated by Vietnam’s budget carrier Jetstar Pacific. VietJet Air is planning to launch services on April 30, or more than two months after Asia’s leading low-cost carrier AirAsia announced to purchase a 30% stake in the first private airline licensed in Vietnam.

Tags: VietAir, Vietnam air, Vietnam air industry, Vietnam aviation, Vietnam aviation sector