No new airlines until aviation market recovers: ministry

Thursday, May 14, 2020 11:54

Grounded planes at Noi Bai International Airport. Viet Nam would temporarily halt consideration for new airlines until the aviation market has recovered. — VNA/VNS Photo Huy Hung

Viet Nam will temporarily halt the consideration of new airlines until the aviation market has recovered from the COVID-19 pandemic, according to Minister of Transport Nguyen Van The.

The ministry said the virus caused the global aviation market to collapse and Viet Nam’s was no exception, which saw considerable drops due to restrictions in travel with all international and most domestic flights suspended in March and April to prevent the spread of the virus.

Priority would be given to recovering the aviation market, resuming flights and removing the difficulties of exiting carriers while the foundation of new carriers would only be considered after the market recovered, The said.

Three airlines were waiting to take off.

Vietravel Airlines of tourism company Vietravel with a total investment of VND700 billion (US$30.4 million) got the Prime Minister’s approval for the investment guidelines in early April and expected to be able to take off in early 2021.

The also asked the Civil Aviation Administration of Vietnam to provide instructions to Vietravel Airlines to complete the application for an air transport licence. The evaluation of the carrier’s application must focus on the feasibility and efficiency of the investment project and the company’s development strategy with regard to the impacts of COVID-19.

Kite Air of hospitality group Thien Minh and Vietstar Airlines of Vietstar Airlines Multirole Corporation were racing for permits.

Previously, Vietnamese conglomerate Vingroup abandoned plans to launch Vinpearl Air, just months after announcing the new carrier.

With the ministry’s decision, these airlines must continue to wait for permits.

There were five local commercial airlines in operation, including Vietnam Airlines, Jetstar Pacific, Vietjet Air, Vietnam Air Services Company (VASCO) and Bamboo Airways.

A report by the ministry at the end of April showed that the aviation industry was hit hard by the COVID-19 pandemic. It was estimated that Viet Nam’s aviation market would serve around 43 million passengers this year, a drop of 46 per cent against 2019.

Dinh Viet Thang, Director of the Civil Aviation Administration of Vietnam, said the aviation market was seeing rapid recovery as social distancing was loosened.

In Viet Nam, domestic flights resumed in late April, while international flights were expected to partially resume from the beginning of next month.

Thang predicted that the domestic market could not recover to 2019’s average level until mid-2021. He also forecasted the international market would not recover until the end of next year at the earliest.

In mid-April, Prime Minister Nguyen Xuan Phuc asked the Ministry of Transport to give careful consideration to the foundation of new airlines to ensure the efficiency of State’s management and sustainable development of the airline industry. — VNS

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