Foreign ownership rise could lead to aviation deals

The proposal to raise the foreign ownership cap in Vietnam's aviation sector from 34 to 49 per cent, under the draft decree on air transport currently under discussion, is being viewed as a major policy shift that could open a new chapter for the country's aviation merger and acquisition market.

- By Luu Quang Vu Head of Investment Promotion and Connection, Vietnam M&A Association

The proposal comes at a time when the industry is seeking stronger access to capital and improved competitiveness. Increasing the foreign ownership limit in domestic airlines is not merely a technical adjustment to equity ratios, but a strategic decision with long-term implications for the sector and for national security.

For many years, the 34 per cent cap has been seen as a significant constraint, making Vietnamese airlines less attractive to international investors. Raising the ceiling to 49 per cent could significantly improve airlines' access to long-term capital, allow for a more diversified shareholder base, and support investment in fleet expansion, technology upgrades, and operational restructuring.

Beyond capital, deeper foreign participation may also bring management expertise, advanced operating know-how, and stronger global connectivity, while encouraging new business models and greater innovation across the industry.