VASCO was expected to operate 10 airplanes. — Photo vnexpress.net

HÀ NỘI (VNS) — Newly-established airline VASCO will be renamed SkyViet, the Ministry of Transport said in a report submitted to the Government.

National flag carrier Vietnam Airlines announced the establishment of the new VNĐ300 billion (US$13.4 million) airline early last month, based on the restructuring of its subsidiary, Vietnam Air Services Company, or VASCO.

VASCO was expected to operate 10 airplanes.

It received a certificate from the Civil Aviation Authority of Việt Nam (CAAV) to operate aircrafts, and was granted a transportation code by the International Air Transport Association, the report said.

The HCM City Department of Planning and Investment certified SkyViet’s business registration on March 3, and the airline was set to begin operations last Friday.

Flight booking information is now available at the VASCO website, vasco.com.vn.

Việt Nam News called the VASCO head office in HCM City on Friday, but reached no officials for further comment on flight services.

VASCO has been reorganised as a joint stock company, in which Vietnam Airlines owns a 51 per cent stake, and affiliates of the Việt Nam Technological and Commercial Joint Stock Bank (Techcombank) hold the remaining equity.

More specifically, Vietnam Airlines contributes capital with its tangible assets being managed and operated by VASCO, including ATR72-500 planes and engines. It also contributes capital worth about VNĐ53.7 billion.

Investment management service provider Techcom Capital contributes 48 per cent to the equity of VASCO, and project development firm Techcomdeveloper contributes 1 per cent.

According to the transport ministry, VASCO will operate domestic routes not capable of receiving jet airplanes, such as routes to Côn Đảo, Cà Mau, Điện Biên and Kiên Giang.

The ministry said these routes were economically and socially meaningful, although the company was likely to face certain challenges in its first stages.

Vietnam Airlines expected VASCO to carry about 650,000 passengers by 2018.

The new airline was established as Vietnam Airlines continued to lose its market share to budget carrier VietJet Air. This occurred despite Vietnam Airlines holding a 70 per cent stake in another low-cost carrier, Jetstar Pacific.

The former VASCO, which was established in 1987, reportedly used AN2, AN30 and KingAir B200 aircrafts to provide services such as topography and geological surveys, emergency aid, rescues and commercial transportation for some short routes.

Late last month, the finance ministry also asked the Government to grant an air transport business licence to Vietstar Airlines to operate as a passenger and cargo carrier.

However, CAAV Director Lại Xuân Thanh told Government portal chinhphu.vn that SkyViet and Vietstar would not make a significant difference in domestic aviation market shares over the next three to five years.

Vietnam Airlines and VietJet Air would continue to be the two “giants” in the market, he said. — VNS