The Government has just urged relevant ministries and agencies to strictly adhere to regulations on business conditions when considering new civil aviation licenses, saying investors must meet all prescribed requirements if they want to get the go-ahead.

The approval in principle and issuance of business certificates in the aviation sector must be strictly considered in line with the prevailing regulations, according to the Government Office’s notice on a conclusion which Deputy Prime Minister Trinh Dinh Dung made at a recent meeting.

The move is to enhance the effectiveness of investment and business activities, foster the healthy and sustainable business growth, and ensure the absolute aviation safety and security.

The civil aviation industry which remains a conditional business sector requires huge investment capital. It has direct impacts on national defense and security, foreign affairs and traffic safety, according to the notice, which is made in response to recent petitions by the Civil Aviation Administration of Vietnam (CAAV) asking the Transport Ministry to quickly give the green light to some potential investors.

The Deputy PM asked the Transport Ministry to guide investors to fully comply with laws on investment, civil aviation, and other regulations. Besides, the ministry was told to review those cases asking for air services licenses in a proper manner before seeking the PM’s final say.

In particular, he demanded the Transport Ministry work with the ministries of planning-investment, finance, justice, and culture-sports-tourism, as well as relevant agencies to instruct Tan Cang Offshore Travel and Flight Services JSC to complete its files applying for a business license for general civil aviation services.

Besides, the Transport Ministry was tasked with instructing Globaltrans Air JSC to conduct regulatory procedures before its general aviation business license can be renewed.

Notably, the Deputy PM asked the Transport Ministry to team up with the Defense Ministry, other ministries, sectors and localities to inspect and review the implementation of the master plan for the aviation sector, and other relevant legal regulations. The results must be sent to the Government prior to the end of next month.

The Government last year refused to approve an application for establishment of Vietstar Airlines, as the investor had yet to meet the chartered capital requirement. Its paid-in capital at the time was over VND70 billion less than the required VND700 billion.

More recently, CAAV sent a written inquiry to the Transport Ministry about the principle of establishing airlines, whether to follow the Investment Law or the Civil Aviation Law, together with Decree 92/2016/ND-CP on business conditions in the aviation sector.

The decree stipulates a civil aviation firm must have chartered capital of at least VND700 billion to establish an airline with at least10 planes. However, at the time of application, Vietstar had only VND625.7 billion in an escrow account.

CAAV said the Investment Law has made life more difficult for investors. For example, Tan Cang Offshore Travel and Flight Services JSC has yet to be granted an air business license though it had submitted the required VND700 billion, CAAV said.

Last May, FLC Group, owner of Viet Bamboo Airlines Co Ltd (Bamboo Airways), sent an airline establishment request to CAAV, but failed to produce a financial confirmation statement as required by the current civil aviation rules.

Projects in the air transport sector must be approved in principle by the Prime Minister, according to Article 31 of the 2014 Investment Law. If the required capital is paid in sufficiently, or the balance of an escrow account meets the minimum capital requirement, a long time of consideration will also make life difficult for investors, as in the case of Tan Cang, according to CAAV.

Therefore, CAAV proposed the Transport Ministry ask the Prime Minister to issue a business license for FLC Group pending the submission of a financial confirmation statement in a later date.

SGT