The State Capital Management Committee wishes to halt the approval of new airlines

DNHN - To regulate the size of the domestic aviation sector, the Ministry of Transport need alternatives. As a result, it is important to limit the number of new airlines until the market recovers; in the near term, limit the licensing of further fleets until domestic carriers have exhausted all available aircraft, and the size of operation returns to that of 2019.

According to the financial report, Vietnam Airlines would lose 13,337 billion VND in 2021, compared to 10,056 billion VND in 2020. Vietnam Airlines' consolidated financial accounts for the first quarter of 2022 showed a deficit of VND 2,700 billion.

Notably, Vietnam Airlines' equity was negative following 9 straight quarters of loss. If the current scenario continues, the national airline may be compelled to delist before the end of the year.

Meanwhile, Vietjet Air loses VND 3,088 billion in 2021 and VND 3,134 billion in 2020, for a total loss of 6,222 billion dongs in two years. Although Bamboo Airways is not required to reveal financial results, when it requested to fly straight to the United States (in 2020), it stated a loss of USD 156 million, or roughly VND 3,600 billion.

Mr Nguyen Ngoc Canh, Vice Chairman of the State Capital Management Committee, believes that the Ministry of Transport needs measures to control the domestic aviation market's growth.

As a result, it is important to limit the number of new airlines until the market recovers; in the near term, limit the licensing of further fleets until domestic carriers have exhausted all available aircraft, and the size of operation returns to that of 2019.

In the long-term, the Ministry considers and proposes that the number of aircraft granted not exceed the growth rate of the airport system's receiving capacity and match the growth rate and market management capacity; Open the door with a schedule with foreign airlines until the aviation market recovers to regulate and limit the number of flights.

Furthermore, Mr Pham Ngoc Canh advised that the government adopt measures to manage and regulate pricing during atypical periods to minimize head-to-head rivalry and safeguard the development of air freight.

The establishment of minimum pricing (floor prices) for air transportation services, as well as basic passenger transportation services for flights, ensures the industry's steady and sustainable development.

Continue to assist the aviation industry in line with CP Resolution 43 until the market recovers, such as by lowering take-off and landing costs, flight management, providing free government guarantees, and increasing the reduction of environmental protection tax for enterprises.

Under the strain of rising raw material prices, the State Capital Management Committee advocated exempting and reducing the 100% of environmental protection fees for Vietnamese airlines.

PV