HCMC – The Civil Aviation Authority of Vietnam (CAAV) has rejected IPP Air Cargo JSC’s proposal to establish an airline specializing in cargo transport, saying that the establishment of new airlines will only be considered after 2022, once the aviation market recovers.
According to CAAV, the delay in the consideration of the establishment of the cargo airline is aimed at minimizing the supply-demand imbalance amid the Covid-19 pandemic, affecting the local aviation sector’s sustainable development, the local media reported.
The authority will continue keeping a close watch on the market and the developments of the pandemic and report to the Ministry of Transport about the possibility of the establishment of a cargo airline after 2022.
Vietnamese air carriers have been operating flights transporting cargo and even loading cargo in cabins, to increase their revenues during the pandemic.
As of June 28, seats on nine aircraft have been removed so that they can be used to transport cargo, comprising five of Vietnam Airlines and four of Vietjet. In addition, some aircraft have been allowed to transport cargo without removing their seats.
The proportion of air carriers’ revenue from cargo transport activities during the pandemic period has tripled that of the pre-pandemic period.
IPP Air Cargo, whose chairman is businessman Johnathan Hanh Nguyen, is an arm of Imex Pan Pacific—a retailer that makes up nearly 70% of Vietnam’s luxury items market.
IPP Air Cargo airline has a total investment of VND2.4 trillion, including 30% of IPP Air Cargo JSC’s equity and 70% mobilized.
IPP Air Cargo expected to be granted the air transport license in the third quarter of this year and launch its first flight in the second quarter of next year.
If approved, IPP Air Cargo will operate five planes in its first year of operation, seven in the second year and 10 in the third year.