VietNamNet Bridge - The government has rejected proposals to license private air carriers, saying that investors must meet all requirements stipulated in the current laws. 

Replying to proposals by state management agencies to grant licenses to some private airlines, Deputy Prime Minister Trinh Dinh Dung’s instructed that applications must be considered thoroughly and investors must comply with all requirements stipulated by the Investment Law, Civil Aviation Law and other related laws.

The government has also requested ministries to check the dossiers for the applications for establishing airlines carefully before reporting the cases to the government.

The request was made after the Ministry of Transport (MOT) recently asked the government to grant a license to Vietstar Airlines, even though the airline still lacked VND70 billion out of VND700 billion worth of capital as stipulated by law.

Recently, the Civil Aviation Authority of Vietnam (CAAV)  sent a document to MOT asking which law to apply on doing business in the aviation sector: the Investment Law or the Civil Aviation Law and Decree No 92.

The government has rejected proposals to license private air carriers, saying that investors must meet all requirements stipulated in the current laws.

CAAV believes that the provisions of the Investment Law are placing difficulties for enterprises, citing the case of Tan Cang Offshore Travel & Flight Services JSC. The company handed in enough VND700 billion, but it still has not received the license.

Though Bamboo Airways of FLC Group still did not have the document confirming the contribution of sufficient charter capital as required by law, CAAV still urged MOT to report to the government and ask for a license for the airline.

In the case of Bamboo Airways, which plans to provide domestic and international routes with 10 aircraft, it will have to have the minimum capital of VND700 billion. The amount of money must be transferred into its bank account and the capital transfer must be certified by credit institutions or the Ministry of Finance.

When asked why CAAV still wanted to grant a license to Bamboo Airways even though the airline still had not handed in the required capital, a representative of CAAV said it would be better to allow Bamboo Airways to ‘owe’ the certification to create favorable conditions for the airline.

In principle, the charter capital must be kept at banks for a long time (in case of Tan Cang, it has been kept there for one year).

In related news, FLC Group, the owner of Viet Bamboo Airlines Company Limited (Bamboo Airways), stated it plans to buy 15 planes ahead of its start of operations in 2018.

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