IPP Air Cargo withdraws permit application

IPP Air Cargo logo on a refitted airplane for cargo. (Photo: IPP Air Cargo)

Hanoi (VNS/VNA) - IPP Air Cargo, in anunanticipated move, has withdrawn its application for a cargo flight permit,citing “worsening economic conditions”, “looming global recession” and“volatile fuel prices”, all of which likely will result in numerous challengesfor global freighters.

“We will consider our position and reapply once the globalmarket recovers and shows signs of stability,” said IPP CEO Le Hong Thuy Tienin a statement.

Earlier, in January, IPP Air Cargo filed for a cargo flightpermit with a project to invest 2.4 trillion VND (96.5 million USD) with 30%of the initial investment from the company. The company said it had plans tooperate five cargo planes during the project’s first year, seven inthe second and 10 in its third.

The company’s business plan said the company could haul up to115,000 tonnes of goods during the first year with an estimated revenue of 71million USD. The company expected a profit return starting from its fourthyear.

According to the Civil Aviation Authority of Vietnam (CAAV), in apreparatory move, the company signed a Memorandum of Understanding with Boeingto purchase 10 B777F airplanes. In addition, the air freighter signed a Letterof Intention with BBAM, an airplane lease and management company based in SanFrancisco, the US, to rent four B737- 800BCF airplanes. To date, one ofwhich was refitted for cargo and repainted with IPP Air Cargo's logo.

All IPP Air Cargo’s registered airplanes were considered fit forservice and the company met all requirements under current regulations, saidCAAV.

There are five airlines registered to haul cargo withpassenger airplanes in Vietnam. The Southeast Asian country has not yet granteda cargo flight-only permit.

The mentioned-above airlines accounted for 18% of international aircargo in Vietnam in 2019, dropping to 115 in the 2020-21 period. The rest ofthe market share was divided among 29 foreign airlines operating in thecountry.

In an interview published on the company’s website, IPP AirCargo’s Chairman Jonathan Hanh Nguyen said air freight prices, during the peakof the pandemic, went up significantly, as much as five times on severaloccasions.

Nguyen said with 88% of the market share in the hands of foreignair freighters, “the demand for air freight will remain congested, and pricevolatility will make it tough for domestic export-import businesses.”/.

VNA