Vietnam loosens regulations on new airlines

The minimum capital needed to establish an international airline in the country has been lowered from VND700 billion ($30.3 million) to VND300 billion ($13 million) for airlines with 10 aircraft or less, according to a new decree signed by Prime Minister Nguyen Xuan Phuc.

For airlines with 11-30 aircraft, the minimum capital requirement has been lowered from VND1 trillion ($43.2 million) to VND600 billion ($25.9 million); and for over 30 aircraft, from VND1.3 trillion ($56.2 million) to VND700 billion ($30.3 million).

The decree will take effect on January 1, 2020.

It also increases foreign ownership cap in a domestic airline from 30 percent to 34 percent, but there must be at least one Vietnamese individual or company holding a majority stake.

Vietnam now has six domestic carriers: Vietnam Airlines, Vietjet, Jetstar Pacific, Vietnam Air Services Company (VASCO), Bamboo Airways, and newly-licensed Vietstar Airlines, a military-run company.

Hospitality group Thien Minh’s KiteAir, tourism firm Vietravel’s Vietravel Airlines and business conglomerate Vingroup’s Vinpearl Air are vying to be the seventh national carrier.

Last year, Vietnam’s 21 state-run airports served 103.5 million passengers, up 11 percent year-on-year, and the figure is set to rise to 112 million this year, according to the Airports Corporation of Vietnam.