Vietnam's biggest conglomerate, Vingroup, revealed on January 14 that it was scrapping a plan to launch its own airline, Vinpearl Air (Hanoi), local media reported.

Last year, the group applied for an initial operating licence to start airline operations in July 2020, also launching recruitment for management positions and a number of promotional activities. But it had yet to order any aircraft.

In October 2019, the Vietnamese Ministry of Transport approved applications for largescale commercial business licences submitted by Vinpearl Air as well as KiteAir (Tamky) and Vietravel Airlines (VU, Hue Phu Bai Int'l).

However, Vingroup has now notified Vietnam's Ministry of Transport that it will withdraw from the aviation transport services sector, to focus instead on technology development and industrial production, according to the news agency Reuters. It will, however, continue to train pilots at its academy VinAviation.

“Vietnam's aviation market has huge potential and is developing strongly, but there are also large companies participating. Vingroup's strong investment in aviation could lead to oversupply [...] and we also need to focus our resources on the development of technologies and industrial production, so we have decided to withdraw,” the conglomerate's chief executive, Nguyen Viet Quang, said in a statement.

KiteAir is a project of travel and hospitality group Thien Minh Group, while Vietravel Airlines is being established by the tour operator Vietravel. The real estate and leisure firm FLC Group's Bamboo Airways (QH, Hanoi) operated its maiden flight on January 16, 2019, becoming the country's fifth airline.

Vingroup, which has its origins in property and retail, is Vietnam's largest listed firm with a market capitalisation of over USD16 billion. Also selling vehicles and technological devices, it now has plans to enter the artificial intelligence sector.