The Ministry of Finance said that Vietstar Airlines has not yet met the capital requirement to get a licence for providing passenger and goods transport services.
In a letter to the government, the Ministry of Finance said that under the current law, the minimum capital required for the establishment of an airline operating ten aircraft and international transport services is VND700 billion (USD33.3 million), while to date, Vietstar Airlines’ capital is only VND652.7 billion.
The company also needed to provide an bank account balance confirmation of the capital. For capital based on assets, there must be a confirmation by valuation organisations.
Vietstar Airlines currently only has capital confirmation granted by the HCM City Department of Planning and Investment, which is not sufficient. The Ministry of Finance has urged the Ministry of Transport to strictly conform to the regulation when considering Vietstar Airlines’ licensing procedures.
Earlier, in March this year, the Ministry of Transport proposed the government grant the licence for Vietstar Airlines, saying that it had met all requirements.
Regarding the airline’s chartered capital of VND652.7 billion compared to VND700 billion as required, the Ministry of Transport cited the firm’s audited financial report as saying that its capital in reality reached VND700 billion. However, the airline has been in the initial operation stage, so it has used part of the capital for its business activities, resulting in a VND47.3 billion shortfall.
According to the government’s decree, if getting the government’s permission, Vietstar Airlines has six months to finish its necessary procedures for the licence, including making up the required capital as required.
The Ministry of Transport also said that in terms of the capital confirmation, the reported to the government about allowing Vietstar Airlines to use its financial report as a replacement for the capital confirmation document.
Vietstar Airlines is a joint venture between Aircraft Engineering Company A41, the Vietnam Air Force, Vietstar Airways and the Tin Thanh Express Company. It is the country's seventh domestic airline.
For the first five years, Vietstar Airlines will operate Boeing 737 and the Airbus 320 in its initial 3-plane fleet. It is also negotiating a deal to rent three Boeing 737s.
