Airlines query foreign owner limit changes

Raising the foreign ownership limit in Vietnamese airlines to 49 per cent is sparking concern about the risk of losing genuine control.

- By Anh Minh

As of present, the foreign ownership ratio in aviation transport businesses is one of the most sensitive issues in formulating a draft decree on air transport.

According to a document sent to the Ministry of Construction (MoC) in mid-March, state-owned Vietnam Airlines upholds the position to maintain the foreign ownership cap at no more than 34 per cent.

“This is not just an economic issue, but also a key policy decision to protect national interests, airspace sovereignty, and the development of Vietnam’s aviation industry,” said Le Hong Ha, CEO of Vietnam Airlines.

There are seven Vietnamese airlines engaging in regular commercial air transport operations. Vietnam Airlines is the only one with a foreign airline as a shareholder. All Nippon Airways is currently holding about 5.6 per cent of Vietnam Airlines, after purchasing almost 8.8 per cent of the national carrier for over $90 million in 2016.

Vietjet also has foreign investors participating indirectly through investment funds and financial institutions. However, the maximum foreign ownership ratio does not exceed 34 per cent.