Teachers and students of the first pilot training course of VinAviation School. (Vingroup Photo) Hanoi (VNA) – Vietnam’slargest conglomerate Vingroup on January 14 announced that it is officiallywithdrawing from air transport business.
The announcement was made afterthe assessment of Vinpearl Air’s project was submitted to Prime Minister NguyenXuan Phuc for approval by the Ministry of Planning and Investment.
This means Vinpearl Air willnot be able to take off. Vingroup did not explain the future of this aviationproject in the announcement, but said it wants to focus maximum resources onthe strategic goal of technology and industry development.
Vingroup said this decisionwill not affect its pilot training segment undertaken by VinAviation School.The ongoing training course is being maintained with all commitments made tothe students.
Vingroup confirmed that it willcontinue to participate in construction and aviation infrastructure improvementprojects nationwide.
According to the Vinpearl Airdossier, the airline was supposed to be based at Noi Bai International Airportwith total investment of 4.7 trillion VND (202.3 million USD).
It was scheduled to beginoperation in July 2020, if approved by the Prime Minister. The number of aircraftin the first year was six narrow-body planes with 150-220 seats. On average, anadditional six aircrafts were due to be put into operation annually. Theairline was expected to reach 30 aircraft by 2024.
It was expected that by 2025,Vinpearl Air would operate 62 domestic routes and 93 international routes.
Nguyen Viet Quang, DeputyChairman and CEO of Vingroup, said Vietnam’s aviation market has a lot ofpotential and is developing strongly, but there are also large companiesparticipating in the area.
“Vingroup's strong investmentin aviation can lead to oversupply, causing waste. We also need to focusresources on developing our technology and industry segment, so we decided towithdraw,” Quang said.
In the development strategyannounced in 2018, Vingroup aims to become a leading group in technology,industry, trade and service in Vietnam in the next 10 years.
In order to implement thisstrategy, in December 2019, Vingroup withdrew from retail and agriculture(Vinmart, Vinmart and VinEco). The group later announced the closure of itsVinpro and Vien Thong A electronics stores to dedicate resources to themanufacturing sector.
The decision to stop investingin aviation is a step in restructuring activities, focusing on the corepriorities of the group, Quang said.
The domestic aviation market isconsidered to be reaching a growth saturation point due to airportinfrastructure bottlenecks. Vietnam has five commercial airlines withsignificant market share, including Vietnam Airlines, Vietjet Air, BambooAirways, Jetstar Pacific Airlines and Vietnam Air Services./.
VNA
