HANOI, May 13 (Reuters) – Vietnam is considering raising the foreign ownership cap for domestic airlines to 49% from 34%, state media reported, citing a draft document from the Construction Ministry.
The move aims to help carriers attract investment, strengthen finances and access modern technology as well as management and operational expertise from their foreign partners, Dau Tu newspaper reported late on Tuesday, citing the draft.
• Raising the cap would also align with Vietnam’s commitments under the free trade agreements it has signed, the draft said.
• Vietnam currently has seven airlines, led by flag carrier Vietnam Airlines and budget airline Vietjet.
• Local carriers have been forced to scale back operations because of surging jet fuel costs caused by the Iran war.
• The government said on Wednesday that local airlines will “further adjust their operations to optimise costs,” without elaborating.
• It added that jet fuel prices have risen by 88% since the conflict began in late February, with supply still uncertain and costs likely to stay elevated.
(Reporting by Khanh Vu; Editing by David Stanway)