Indochina Airline case will be reported to PM

A case regarding Indochina Airlines has forced the carrier to stop providing flights since October 2009, and pending the outcome, the service is facing the risk of having its operation license revoked. The Ministry of Transport says it is collecting necessary documents and consulting with relevant ministries, and it will report the case to the Prime Minister.

The information was released by Than Van Thanh, Senior Official of the Ministry of Transport, on June 3.

“The ministry has received the report about the situation of domestic airlines, including Indochina Airlines from the Civil Aviation Authority of Vietnam (CAAV). The Ministry is considering related legal documents, and it will consult with relevant ministries before reporting the case to the Prime Minister by the end of June,” Thanh said.

Vo Huy Cuong from CAAV said Indochina Airlines is the first private airline which got its operation license on May 30, 2008. The airline operated its first commercial flight on November 25, 2008. However, the air carrier has been forced to cope with too many difficulties during its operation. Therefore, in late October 2009, Indochina Airlines stopped providing flights. After numerous efforts, the air carrier still has been unable to resume flights.

Under Government Decree No 76, after 24 months of operation, every air carrier has to possess AOC (air operator certificate), or it will have its operation license revoked. However, by May 31, the airline still had not declared if it has obtained the certificate or not.

CAAV has also asked the airline to submit detailed reports about its financial situation. However, CAAV has not received reply yet.

However, it appears clear that Indochina Airlines has been bogged down in debts.

The carrier has yet to secure charter capital worth VND200 billion, the minimum level required to operate domestic flights in Vietnam. In addition, it still owes tens of billions of dong to other service providers.

Tran Huu Phuc, director of Vietnam Air Petrol Co. (Vinapco), said on Tuesday that the airline owes the company VND20 billion.

“We have sent Indochina Airlines our request for debt payment every two weeks, but have not received any response. It seems to us that the airline does not have an official contact address,” Phuc said.

Several months ago, Ha Dung, the main shareholder of Indochina Airlines, who is well known in Vietnam as a famous musician, announced he has successfully persuaded existing shareholders to inject more capital. However, in fact, the account of the air carrier remains empty.

With the silence kept by Indochina Airlines, analysts believe it is highly possible that the airline’s license will indeed by revoked.

Thoi bao Kinh te Vietnam

Tags: Indochina Airlines, Vietnam aviation, Vietnam aviation industry, Vietnam aviation market