Home » Aviation, Breaking News » Vietnam’s Vingroup grounds new airline before it could fly

Vietnam’s largest real estate company Vingroup has scrapped its plan to establish an air transport business even before the airline could take off.

The group made the official announcement of the pullout of its proposal on January 14 after the Ministry of Planning and Investment submitted an assessment of the Vinpearl Air project to the Prime Minister for approval, according to local news reports.

The company added that it would continue to participate in construction and aviation infrastructure improvement projects nationwide.

Vingroup said this decision would not affect its pilot training segment undertaken by VinAviation School. The ongoing training course is being maintained with all commitments made to the students.

Nguyen Viet Quang, deputy chairman and CEO of Vingroup, said that Vietnam’s aviation market has a lot of potential and is developing strongly, but that there are also a number of large companies participating in the field.

“Vingroup’s strong investment in aviation can lead to oversupply, causing waste. We also need to focus resources on developing our technology and industry segment, so we decided to withdraw,” Quang said as quoted by media outlets.

Vinpearl Air was supposed to be based at Noi Bai International Airport and was scheduled to begin operation in July 2020, if approved by the Prime Minister.

In December 2019, Vingroup withdrew from retail and agriculture (Vinmart, Vinmart and VinEco), saying it wanted to focus maximum resources on the strategic goal of technology and industry development. The group later announced the closure of its Vinpro and Vien Thong A electronics stores to dedicate resources to the manufacturing sector.

The domestic aviation market is considered to be reaching a growth saturation point due to airport infrastructure bottlenecks. Vietnam also already has five commercial airlines with significant market share, namely, Vietnam Airlines, Vietjet Air, Bamboo Airways, Jetstar Pacific Airlines, and Vietnam Air Services.

A few days ago, integrated travel and hospitality group Thien Minh Group announced it has filed for a license to operate a new airline, KiteAir, in the country this year. On the other hand, tour operator Vietravel is currently waiting for approval to launch its newly established Vietravel Airlines, also targeted for launch in 2020.

Photo by Anne Nygård on Unsplash

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