VietNamNet Bridge - The Ministry of Transport (MoT) has asked the Prime Minister’s permission to grant an air transport license to Vietstar Airlines Multirole Corporation (Vietstar Airlines).

With charter capital of VND800 billion (nearly $40 million), Vietstar Airlines will offer passenger and cargo transport services in the domestic aviation market.

In the initial five-year period, Vietstar Airlines will use a fleet of three Boeing 737/Airbus 320s for passengers and Vietnam’s specialized aircraft for goods transport.

Vietstar has outlined a detailed development strategy over the next five years targeting the domestic market, Northeast Asia and Southeast Asia.

Vietstar was established in 2010 by the Air Defense Arm of the Ministry of Defense. Vietstar has received the aviation business license of the Civil Aviation Administration of Vietnam, for use of air taxi services using small aircraft.

Along with civil business, the company also offers services for military forces, such as transporting military equipment and for survey flights. In addition, this unit participates in maintenance and repair of aircraft, providing ground services, cargo handling, passenger airplanes, and charter.

The three major shareholders of Vietstar Airlines are the A41 Aircraft Repair Company, the VietStar Aviation JSC and Tin City Fast Delivery JSC.

"The company has built a corporate indentity, including a logo and icon, suitable for its business operations," said the General Director of Vietstar Airlines, Pham Trinh Phuong.

According to audited financial statements by December 31, 2015, Vietstar had equity of VND652.7 billion (over $30 million) while the minimum capital for airlines with passenger and cargo transport services must be VND700 billion (nearly $35 million).

"The Civil Aviation Administration of Vietnam will create favorable conditions for Vietstar Airlines to participate in domestic and international air transport and direct the airline to become a cargo carrier," said CAAV chief Lai Xuan Thanh.

According to CAAV, Vietnam currently has eight airlines, including Vietnam Airlines, Jetstar Pacific Airlines, Vietnam Air Services Company (VASCO), VietJet Air, Blue Sky Travel, Event Company Ltd, Hai Au Airline JSC, and Green Planet Technology JSC.

Vietnam has no airlines specializing in cargo transport.

As of December 31, 2015, the number of aircraft registered with Vietnamese nationality totaled 131 units of 10 categories, owned by six airlines. In particular, Vietnam Airlines owns the largest fleet with 86 aircraft, including 51 Airbus321; 10 Airbus330; 3 Airbus350; 7 Boeing777; 11 ATR27; and 4 Boeing 787. Vietjet ranked second with 25 aircraft, including 22 Airbus 320 and three Airbus 321. Jetstar Pacific came third with 11 aircraft, including 9 Airbus320 and 2 Airbus 321.

The remaining airlines including VASCO, Hai Au, Hanh Tinh Xanh have 2-3 aircraft each.