The Vietnamese Government should not consider licensing new airlines at the moment, (including air freight carriers) to avoid supply-demand imbalance and undermining the sustainable development of the aviation industry in the context of the Covid-19 pandemic, according to the Vietnamese Ministry of Transport’s latest proposal to the Prime Minister. 

Vietnam may consider licensing new airlines after 2022. Photo: Vietnam Airlines

The proposal came from the request of the Government for more concrete guidance on building and appraising the application for setting up IPP Air Cargo JSC, an air transport business, last month.

The Ministry of Transport (MoT) will continue monitoring the market situation and the impact of the pandemic and report to the Prime Minister for consideration and decision on the possibility of establishing a new airline when the aviation market may recover by 2022, according to the latest official letter signed by Le Anh Tuan, Deputy Minister of Transport.

The ministry emphasized, since the Covid-19 pandemic broke out, local airlines have suffered serious damage. 

Currently, Vietnamese airlines including Vietnam Airlines, Vietjet Air, Bamboo Airways, Pacific Airlines, and Vietravel Airlines are conducting freight service, including carriage of goods in the passenger cabin, in order to generate additional revenue to compensate for damage caused by the Covid-19 pandemic.

As of June 28, these airlines have repurposed nine-passenger aircraft for cargo flights by removing passenger seats. In addition, some other aircraft are allowed to carry goods in the cabin without having to remove seats provided that they do not carry passengers on the same flight.

In a last May’s document sent to the Prime Minister, the MoT said the establishment of a new airline should only be considered after the aviation market recovers (expected 2022) and received the acceptance of Deputy Prime Minister Trinh Dinh Dung.

According to the ministry, in the short term, the aviation industry needs to prioritize recovering the domestic and international air transport market and removing difficulties for businesses in the sector.