With the borders of Vietnam opening in just one week, local airlines are surprised to hear the approval for two more airlines to join the already saturated Vietnamese aviation market. Within the same week, news broke out that the Civil Aviation Authority of Vietnam (CAAV) has issued green lights for both the applicants. Sun Air Jet and IPP Air Cargo, subsidiaries of well-established business groups, Sun Group and Imex Pan Pacific Group (IPPG) respectively, are expected to take a stake in the highly competitive aviation market in Vietnam.
Sun Air Jet by Sun Group
On Wednesday, Sun Group (Vietnam) received a business license for its subsidiary – Sun Air Jet, which targets charter services for premium business tourists. The company plans to operate initially two Gulfstream G650s with a capacity of up to eighteen passengers. Depending on market demand, Sun Air seeks to operate a total of five private jets, one helicopter, and two seaplanes, presumably based in Danang, headquarter of its parent group. Sun Air will target higher-end business travelers by connecting various tourist attractions across the country.
Behind Sun Jet Air
Founded in 2007, Sun Group is one of the largest real estate and infrastructure developers in Vietnam. The company has also been a pioneer of leisure travel in the country, with numerous joint ventures with international hotel brands like Intercontinental and JW Marriot. Infrastructures such as airports and theme parks are also one of its focuses to connect various aspects of their business fields. Van Don International Airport which serves the famous tourist attraction Ha Long Bay was built and operated by Sun Group since 2014, bringing in 260,000 passengers annually before the pandemic.
First Cargo Airline in Vietnam
Solely owned by Vietnamese entities, IPP Air Cargo will be the first full-fledged cargo airline in the country. The CAAV has recommended to the Ministry of Transport for the issuance of an air transport license for the country’s first proposed cargo airlines. With initial charter capital of VND300 billion (USD 13 million), IPP Air Cargo has met all requirements for a license, including that it is entirely funded by local entities. The IPP Group’s plan for the application was delayed until now as CAAV announced last year that new applications for airlines would not be considered amid the COVID-19 pandemic. The airline plans to operate initially five Boeing 737s or Boeing 777s and double its fleet size in the fifth year.
Imex Pan Pacific Group
Behind IPP Air Cargo is the Imex Pan Pacific Group (IPPG), responsible for 70% of the country’s luxury retail. Since 1985, the IPPG has begun to seize subsidiaries and joint-ventures including duty-free shops in international airports. The group is also responsible for the introduction of fast-food culture into the country by franchising Burger King and Domino’s Pizza.
“Currently, Vietnam lacks a specialized airline that transports goods. Domestic airlines have recently expanded freight delivery by passenger aircraft, although this is merely a short-term solution, fighting fires only for the current oversupply of aircraft”- Jonathan Hanh Nguyen, Chairman of IPPG
Currently, Vietnam has six operating airlines: flag carrier Vietnam Airlines, LCC Vietjetair, Bamboo Airways, Pacific Airlines, VASCO, and Vietravel Airlines. With limited airport capacity and capability, do you think the country can handle two more contenders to the industry? Let us know below.
