An airplane of Viet Nam Airlines. The corporation joined with Techcombank to set up a new airlines based on the restructuring of its subsidiary VASCO. — Photo soha.vn

HA NOI (Biz Hub) — Viet Nam Airlines Corp officially set up a new airline based on the restructuring of its subsidiary Vietnam Air Services Co. (VASCO), the national carrier said in a press release on Monday.

The new airline will be named VASCO and has a minmum charter capital of VND300 billion (US$13.43 million) and about 10 airplanes.

Viet Nam Airlines will hold 51 per cent of the venture, while the Viet Nam Technological and Commercial Joint Stock Banks (Techcombank) will have a 49 per cent stake.

As soon as after the airline is established, Techcombank will make an initial investment of VND147 billion, while Viet Nam Airlines will provide aircrafts and other assets worth about VND157 billion.

Viet Nam Airlines said the assets will be valued by the Viet Nam Valuation and Finance Consultancy Jsc (VVFC) under the Ministry of Finance.

A representative from Techcombank will be appointed as VASCO's chairman, while the Chief Executive Officer of VASCO will be from Viet Nam Airlines.

In its first stages, VASCO will continue to operate ATR72 aircrafts on domestic routes not capable of receiving jet airplanes such as to Con Dao, C Mau, Rach Gia and Ðien Bien.

The move comes as Viet Nam Airlines continues to lose its domestic market share to the low-cost VietJet Aviation Joint Stock Co. Currently, Viet Nam Airlines also holds 70 per cent of stake in another low-cost carrier, Jetstar Pacific Airlines.

According to the International Air Transport Association, Viet Nam is expected to become one of the world's top 10 fastest-growing aviation markets in the next two decades. — VNS