Ministry clears up questions about pending Vietstar Airlines

Regarding reports that the company is said to lacks an additional VND47.3 billion (US$ 2.1 million) to reach the minimum capitalization of VND700 billion required for an airline, as per government Decree 30 issued in 2013, the ministry said the company’s audited financial report to December 31, 2015 showed owner’s capital has reached VND700 billion.

However, as all the capital has been invested in the company’s operation and it has yet to earn any revenue, it is running a profit deficit of VND47.3 billion.

The ministry added that if the Prime Minister approves the licensing of Vietstar, the company will have six months to complete its papers.

Vietstar has committed to adding capital to meet the requirement if it receives the PM’s approval, the ministry said, stressing that the licence is only issued when the business fulfills all requirements stipulated in Decree 30.

Founded in 2010, Vietstar Airlines is owned by the Vietnam Air Defence and Airforce, under the Ministry of National Defence. The carrier was granted a general commercial aviation business licence in June 2011, providing air services for economic, social and tourism purposes, aircraft repair and maintenance and airport service.

The MoT highlighted that a new airline will contribute to competitiveness in the sector, providing more air transport choices for passengers, as well as bolstering socio-economic and tourism development in localities around the country.

Vietnam’s air market is forecast to see a rise of 19%, to 45 million passengers this year, with the domestic sector accounting for more than 58%.

Statistics of the Civil Aviation Authority of Vietnam (CAAV) show that the country currently has eight airlines, including Vietnam Airlines, Jetstar Pacific Airlines, Vietnam Air Services Company (VASCO), VietJet Air, Blue Sky Travel, Event Company Ltd, Hai Au Airline JSC, and Green Planet Technology JSC.