SkyWest seeks to buy into Mekong Air

SkyWest Inc, the holding company for SkyWest Airlines in the United States, is looking to acquire a 30 percent stake in the start-up Vietnam Aviation Joint-Stock Co (Mekong Air) as an option for growth outside the US

An official of the Civil Aviation Administration of Vietnam (CAAV) confirmed the acquisition plan of the Utah-based company in a telephone talk with the Daily on Thursday, saying the aviation watchdog had reported to the Ministry of Transport.

“SkyWest’s plan to own 30 percent of Mekong Air has been forwarded to the Ministry of Transport,” the official said. “This plan will move ahead when the Vietnamese government approves this.”

The official said the company was operating the Bombardier aircraft that Mekong Air planned to use for its services in Vietnam. Mekong Air has chartered capital of 200 billion dong (US$10.5 million), the minimum level required for a carrier that provides domestic services.

SkyWest’s deal will be the second airline stake acquisition in Vietnam if it is successful. Earlier this year, Asia’s leading low-cost carrier AirAsia secured ownership of a 30 percent stake in Vietnam’s 600 billion dong VietJet Aviation Joint-Stock Co (VietJet Air).

Mekong Air became the third private airline in Vietnam when it got a license from the ministry after prime minister Nguyen Tan Dung approved the establishment of the airline in October 2008.

Mekong Air clarified its intention in its dossier submitted to CAAV to operate some 10 small-sized aircraft with capacity of 70 seats, including Bombardier for services between HCM City and destinations in the Mekong Delta region like Can Tho, Phu Quoc and Rach Gia from early 2010.

Vo Huy Cuong, director of CAAV’s Air Transport Department, said Mekong Air planned to begin services in October this year. This carrier must have an air operator certificate (AOC) as a requirement for a local airline two years after it was licensed.

Cuong told the Daily earlier this week that Mekong Air has contacted CAAV to ask for the AOC procedures in preparation for its take-off in the coming October as it reported recently.

Mekong Air was licensed after VietJet Air and the VND-200 billion Indochina Airlines. VietJet Air plans to commence services in the fourth quarter of this year after a number of delays while the other was grounded in late October last year, less than one year in service.

The government ordered a temporary halt to licensing new private airlines following the approval of Mekong Air, which is the new name of the earlier proposed Phu Quoc Air.

Active on Vietnam’s aviation market at the moment are Vietnam Airlines and its subsidiary Vietnam Air Service Co. (VASCO), and Jetstar Pacific. The two first carriers take the lion’s share of the market.

Saigon Times

Tags: Mekong Air, SkyWest