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Official Gazette

Friday, December 13, 2019

Air transport business requirements relaxed for newcomers

Updated: 08:47’ - 30/11/2019
The Government has issued a new decree to change air transport business requirements with a view to creating favorable conditions for new enterprises to do the business.

Under Government Decree 89/2019/ND-CP of November 18, amending some articles of Decree 92 of 2016 on conditional business lines or activities in the civil aviation industry and Decree 30 of 2013 on air transport business and general aviation activities, foreign-invested airlines will be subject to a foreign ownership cap of 34 percent, higher than the current 30 percent.

Aircarft of domestic airlines at Noi Bai international airport __Photo: Huy Hung/VNA

Such an airline must have at least one Vietnamese entity that holds the largest charter capital proportion. If a Vietnamese legal entity owning an airline has any foreign investment, the foreign ownership cap is 49 percent.

The new regulation, which will come into force on January 1 next year, does not require airlines operating international flights to have a charter capital higher than those offering domestic services only.

Specifically, an airline with a maximum of 10 airplanes must have a charter capital of at least VND 300 billion. For those owning 11 to 30 airplanes and those with over 30 airplanes, the minimum charter capital is VND 600 billion and VND 700 billion, respectively.

At present, an airline with 10 aircraft or less must have a charter capital of at least VND 700 billion to be allowed to operate international flights and VND 300 billion to offer domestic services. An airline with 11-30 airplanes must have at least VND 1 trillion to provide international services or at least VND 600 billion to operate domestic flights.

For an airline owning more than 30 aircraft, the amount is VND 1.3 trillion and VND 700 billion, respectively.

The Government also abolishes a requirement that stakes in foreign-invested airlines must be transferred to foreign investors two years after these airlines get their air transport licenses.

Airport operators must have a charter capital of at least VND 30 billion, much lower than the current level of VND 100 billion for domestic airport operators or VND 200 billion for international airport operators.

In addition, the foreign ownership in these companies must not exceed 30 percent.

The new regulation also sets the age limit for used aircraft imported into Vietnam.

For passenger transportation, the age of a used aircraft must not exceed 10 years counting from the release date to the date of import into Vietnam under a purchase or hire-purchase contract; or not exceed 20 years counting from the release date to the time of expiration of the hire contract. The age of used helicopters must not exceed 25 years.

For cargo transportation and commercial aviation, the age of an aircraft must not exceed 15 years counting from the release date to the date of import into Vietnam under a purchase or hire-purchase contract, or 25 years counting from the release date to the time of expiration of the hire contract. To be imported into Vietnam, an aircraft must be certified by the US Federal Aviation Administration (FAA), European Aviation Safety Authority (EASA) or Vietnamese Aviation Authority.- (VLLF)
 

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