Vietnamese airlines have expressed mixed reactions towards the government's proposal to increase foreign shareholding caps in local airlines from 30% to 49%.
The proposed changes were included in a Ministry of Transport draft decree, published earlier this month, which would amend and supplement a number of articles in Decree 92/2016, the instrument which governs a Vietnam-flagged commercial carrier's financial and shareholding requirements.
According to The Saigon Times, a consultative meeting between MOT officials and aviation industry representatives on July 23 yielded a mixed bag.
Transport Minister Nguyen Van said at the beginning of the dialogue that the decree amendment was aimed at both attracting investors and ensuring enterprise management and governance of aviation activities.
While VietJetAir (VJ, Hanoi Noi Bai International) reacted positively to the proposal, stating that it would make it easier for Vietnamese carriers to gain access to foreign capital needed for growth purposes, state-controlled Vietnam Airlines (VN, Hanoi Noi Bai International) and Jetstar Pacific (Ho Chi Minh City) (a 70/30 partnership between Vietnam Airlines and Qantas Group) reacted coolly.
The report said both Vietnam Airlines and Jetstar Pacific proposed keeping the limit unchanged. Vietnam Airlines Director General, Pham Ngoc Minh, said that allowing foreign investors to hold over 35% of a carrier's charter capital would allow them to gain effective control of an airline's board thus affecting management and business decisions. In addition, he argued that foreign investors could also establish virtual airlines that are only registered on paper, with the aim of selling stock.
For its part, the Civil Aviation Administration of Vietnam suggested maintaining the current cap at 30% while the Tourism Advisory Board and the Private Economic Development Research Board argued for it to be raised to 49%, their reasoning being that doing so would further liberalize air transport by increasing growth while boosting airport infrastructural development.
Following input from the country's operators, the decree drafting department will now present a report on the advantages and disadvantages of a cap hike.
