The Ministry of Transport has asked the Prime Minister for permission to grant a license to the country’s first cargo airline, IPP Air Cargo.
To date, the application for a license for aviation cargo transportation, including market updates and information on IPP Air Cargo JSC and investors, matches Vietnamese laws, the ministry says in its proposal.
The Civil Aviation Administration of Vietnam had earlier reported to the ministry that it had studied the company’s cargo transportation application carefully.
According to the report, IPP Air Cargo has signed a memorandum of understanding to buy 10 Boeing 777 aircraft for this business. It is already in a rental agreement for four Boeing 737-800BCF aircraft with San Francisco-headquartered BBAM Aircraft Leasing & Management. One of them has been converted for cargo transport and delivered to the new company.
Also according to the civil aviation administration, Vietcombank’s Ky Dong branch in Ho Chi Minh City is keeping VND300 billion ($12.64 million) from IPP Air Cargo as regulated by law as the minimum chartered capital of such a business.
In addition, all shareholders, both individual and corporate, hold Vietnamese nationality as regulated by law.
The company’s application is subject to Vietnamese laws, the authority told the ministry.
The IPP Air Cargo project has set its investment at $100 million, with 30% being the shareholders’ equity and the balance being raised from outside sources.
It expects $71 million in revenue and hopes to transport 115,000 tons of cargo in its first year of operations, and looks to make profit in the fourth year onwards.