Deputy Prime Minister Trinh Dinh Dung on April 3 approved the proposal to set up Vietravel Airlines with a capital base of VND700 billion (US$29.72 million), local media reported.

Illustrative photo.

Vietravel Airlines, owned by Vietnam’s leading tour operator Vietravel, plans to provide charter flights for its own tourists and general passengers.

In the first year of operation, Vietravel Airlines would operate a fleet of three airplanes and increase the number to eight by 2024.

The airline is scheduled to start operation in the second quarter this year, with target passengers being some one million tourists Vietravel is serving annually.

Vietnam currently has five operational airlines which are Vietnam Airlines, budget carrier Jetstar Pacific Airlines (with a majority owned by Vietnam Airlines), Vietjet Aviation, Vietnam Air Services (VASCO) and Bamboo Airways.

In addition, Kite Air and Vietstar Air are waiting for operation authorization.

With six ATR72 aircraft, budget carrier Kite Air, owned by Thien Minh Aviation Company, aims to serve passengers in localities with underdeveloped aviation infrastructure such as Dien Bien, Ca Mau, Kien Giang, and Con Dao.

Meanwhile, Vietstar Air, a joint venture airline between private and military entities, is expected to provide prime services for individuals, groups, local and foreign businesses. 

Vietstar Airlines has been given permission by the local aviation authority to operate two types of aircraft, including the Embraer Legacy 600 and Beechcraft King Air B300. 

On January 14, Vietnam’s largest private conglomerate Vingroup announced its decision to withdraw from the aviation market and suspend the project of setting up Vinpearl Air.

Amid the growing impacts of the Covid-19 pandemic, a recent report from the Ministry of Transport suggested Vietnamese airlines could face losses of US$1.3 billion in revenue due to closed skies, up from estimated losses of VND10 trillion (US$429.1 million) in early February and VND25 trillion (US$1.07 billion) in late February.