Business

The Ministry of Transport (MoT) has decided to revoke the operating licences of private domestic carriers Indochina Airlines and Trai Thien Air Cargo.

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Dinh Viet Thang, deputy director of Civil Aviation Administration of Vietnam (CAAV) told the newspaper Thoi bao kinh te Vietnam (Vneconomy) that Indochina Airlines had ceased operating flights on November 25, 2009 due to a number of difficulties including unresolved debts.

Indochina Airlines was the first operational private airline in Vietnam, originally licenced in May 2008. It began operations in November of the same year.

After getting the licence, the airline had registered to fly eight commercial flights on the Hanoi – Ho Chi Minh City and Ho Chi Minh City – Danang routes.

However, because of the global downturn and a drop in customers, the carrier was forced to reduce its fleet and its number of flights by half until it finally discontinued service in November 2009.

At the beginning of last month, the Asian JS Commercial Bank sued Indochina Airlines for uncollected debt worth $1.3 million.

Meanwhile, Trai Thien Air Cargo, with a total charter capital of $500 billion ($23.8 million), received its operating licence for air cargo transport services in Vietnam and on international routes in June 2008 but failed to begin operating.

According to CAAV, five private airlines including Indochina Airlines, VietJet Air, Trai Thien Air Cargo, Blue Sky Air and Air Mekong have been licenced since the first licence was granted by the government to a private airline about four years ago.

Air Mekong is currently the only one to offer flights on domestic routes.

Earlier this week, VietJet Air announced that it will begin domestic flights from December 25, four years after it gained approval from authorities for operations.

A draft decree on aviation regulations is currently being considered by CAAV.

Under the draft, organisations and individuals with a fleet of up to 10 aircraft will be required to have a minimum of VND300 billion ($15 million) in charter capital to operate domestic flights and VND800 billion ($38.8 million) to operate international flights.

The draft to amend governmental Decree 76 on aviation regulations will require companies planning to operate more than 10 aircraft to have a minimum charter capital of VND1 trillion ($48.5 million) in comparison with the current VND800 billion.

If the draft is approved, the tenure of each carrier’s business licence will be cut from 24 months to 18 months.

The draft additionally suggests that carriers must obtain Aircraft Operator Certificates within 12 months of receiving business licences, instead of within 24 months as currently regulated.

Business licences will be revoked if carriers fail to start operations within 18 months.

Vo Huy Cuong, head of the CAAV Transport Department said that existing requirements for carrier charter capital had proven out of date due to inflation and the depreciation of the Vietnamese dong against the US dollar.

Higher charter capital requirements will deter incompetent organisations from operating in the aviation sector, keeping the market healthy and stable, Cuong said.