The aviation industry in Vietnam is facing challenges that are preventing foreign giants from entering the market. Strict management regulations and a tough business environment have made it difficult for new airlines to establish themselves in the industry. However, there are opportunities for foreign investment in airlines such as Pacific Airlines, Bamboo Airways, and Vietravel Airlines.
Despite these opportunities, no foreign partners have been successfully welcomed due to the risks and uncertain profitability of the aviation business. Foreign investors are hesitant to invest in an industry where the costs are high and profits are uncertain. Even established airlines like Qantas Group and ANA Holdings have reduced their stakes in Vietnamese airlines due to profitability concerns. Companies like Vinpearl Air and IPP Air Cargo have halted their plans to enter the aviation market to avoid wasting resources and potential losses.
The capital contribution ratio by foreign partners in airlines is seen as a barrier to deeper involvement of foreign investors in strategic decisions and operations. Policy changes to increase this ratio are being considered to attract more investment. The government is being called upon to support airlines with policies such as reducing taxes and fees to help them overcome difficulties and achieve sustainable development.
Foreign participation could help increase competition, lower ticket prices, but face restrictions due to regulations on the level of foreign ownership in airlines. The Tourism Advisory Board (TAB) has proposed solutions including encouraging government support for new airline licensing and establishment.
In summary, while there are opportunities for foreign investment in the aviation industry in Vietnam, strict regulations, high costs, uncertain profitability, and policy barriers continue to pose challenges for both new and established players in the market.
