Vingroup tycoon scraps new carrier citing competitive pressures
The launch of airline Vinpearl Air was one of the most anticipated events of Vietnam’s 2020 aviation calendar, but it is not to be. Read More »
Last month, Vingroup, owned by the country’s richest man, Pham Nhat Vuong, announced the establishment of Vinpearl, Vietnam’s sixth airline, had been cancelled. The conglomerate said it intended to focus on its investments in the electric vehicle and communications technology sectors.
A company statement announced the shock decision. It said it had informed the Ministry of Transport of its withdrawal from the process of launching the airline, which had been scheduled for July.
It had been widely reported Vingroup would invest US$200 million in a Hanoi-based Vinpearl, add 2,000 jobs to the national aviation head count and operate a fleet of 30 aircraft by 2024.
“Vietnam’s aviation market has a lot of potential and is developing strongly, but it also has large companies already in operation. Vingroup’s strong investment in aviation could lead to an oversupply,” the group’s deputy chairman and chief executive, Nguyen Viet Quang, said in the statement.
Instead the group outlined ambitious plans to concentrate on its US$3.5 billion VinFast car and scooter business and its recently established Vismart smartphone company.
Vingroup has built the world’s third largest vehicle manufacturing plant, VinFast, on an island off Hai Phong and is positioning itself to take on Vietnam consumers preferred automobile marques, Toyota and Honda.
It launched an electric scooter, Klara, last November and will set up a network of charging and exchange centres across the nation where scooter batteries can be re-charged or replaced very cheaply. The first of the service centres are operating in Hanoi and Ho Chi Minh City.