Vietravel Airlines were granted an aviation business licence on October 29 after proving that they had enough capital.
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Vietravel Airlines plan to use three aircraft such as the Airbus 320 Airbus 321 or the Boeing 730 in the first year. The airlines will launch its first flights in late December or early 2021. The airlines have submitted four operational plans for the 2020-2023 period including the impacts to the markets from Covid-19 pandemic.
The Ministry of Finance had said that Vietravel Airlines must submit an application dossier for the aviation business licence and documents from a credit institution that certifies the airline‚Ä's capital. The ministry didn‚Ä't issue the business licence immediately to Vietravel Airlines since most of the capital come from commercial loans. Moreover, the Covid-19 pandemic would cause difficulties for the airline in repaying its debts.
The Ministry of Finance then asked the Ministry of Transport to review Vietravel Airline‚Ä's financial capacity to make sure that they could repay the loans and the minimum capital of VND700bn (USD30m) would not be affected.
After receiving the request from the Ministry of finance, Vietravel Company pledged to provide more capital to Vietravel Airlines. According to Vietravel, tourism firms have unique financial operations. Vietravel earns about USD1m a day. It collects charges from customers 30-45 days in advance and pays partners 45-60 days later. That‚Ä's why the firm always has USD35-40m available for operations.
Vietravel said their focus is on market share, the distribution system and service to ensure efficient financial management so the rate of return on capital would be over 45-60%. According to the plan, Vietravel Airlines would be equitised after one year. Thanks to the customer base of Vietravel Company, Vietravel Airlines will be able to earn about VND2trn (USD86m) in the first year.
From September 17 until now, Vietravel Company has provided VND250bn to Vietravel Airlines to hire and train flight crews and staff after the VND700bn capital was frozen for the aviation business licence application process.
The Civil Aviation Authority of Vietnam said Vietravel Airlines has met all requirements.
