Vietnamese conglomerate Vingroup said Tuesday (14 January) it was abandoning its plans to create a new airline and focus instead on other industrial sectors like technology development and manufacturing. The company had announced plans last year to start an airline called Vinpearl Air, which was set to begin operations this year with six aircraft. The company did not order any planes however. The company said it would continue its venture in training pilots and look for investments in aviation infrastructure.
The company has reportedly been cutting its losses on unprofitable ventures to focus on things like its car venture, which it launched last June. Vingroup said it has notified Vietnam’s Ministry of Transport of its decision.
According to the group’s original plan, Vinpearl Air planned to add six planes on average per year to expand its fleet to a total of 30 by 2024, including 21 narrowbody and nine widebody aircraft.
Nguyen Viet Quang, Vingroup’s CEO, said despite the huge potential of Vietnam’s aviation market, “Vingroup’s investment in the sector could lead to a surplus in supply for the aviation market, while the group needs to focus its resources for the industrial and technology businesses,” according to local media reports.
Vietnam currently has five operational airlines which are Vietnam Airlines, budget operator Jetstar Pacific Airlines (partly owned by Vietnam Airlines), budget carrier VietJet Aviation, Vietnam Air Services (VASCO) and Bamboo Airways.