MPI proposes postponement of Canh Dieu Air establishment project hinh anh 1An airplane of Hai Au - a subsidiary company, specialised in providing sightseeing services of Thien Minh Aviation Joint Stock (Photo courtesy of Thien Minh Aviation Joint Stock)

Hanoi (VNA) - The Ministry of Planning and Investment (MPI) has asked Prime Minister Nguyen Xuan Phuc not to approve plans to open a new airline in Vietnam.

Canh Dieu (Kite) Air hoped to launch in the second quarter of 2020, but the project was put on hold because of the COVID-19 pandemic.

Now the MPI has informed the PM that because the domestic aviation industry was facing so many difficulties, now is not the time to start a new airline.

The Civil Aviation Administration of Vietnam (CAAV) has said the domestic aviation market this year is expected to only receive 42.7 million passengers, a decrease of 46 percent compared to 2019.

Vietnamese airlines now have 214 aircraft, but they have only operated domestic routes and some international cargo flights with the exploitation rate of less than 50 percent compared to their capacity, the administration said.

The Ministry of Transport also asked the Government to only approve the Canh Dieu Air after 2022 when the domestic aviation market recovers.

The ministry also said Canh Dieu Air’s plans were drawn up in 2018-2019 when the domestic aviation market developed with the growth rate of 13-20 percent each year.

The project, worth 5.5 trillion VND (237 million USD), was invested by Thien Minh Aviation Joint Stock Company.

The original plan would have seen six ATR72 aircraft operating flights within Vietnam. Its fleet is expected to increase to 30 planes, including 15 ATR72 and 15 A320/321 or equivalent aircraft, by 2025./.