The challenges being faced by the global air cargo industry due to factors such as flucutations in fuel prices and the worsening global economic situation have forced Vietnam’s IPP Air Cargo, which had applied for an air transport business license in January, to withdraw its application.
“The business situation is not good enough, the world economy is having a bad situation, the global recession is becoming more and more present, and fuel price fluctuations will make the global freight industry difficult,” a document sent by the company to the Government Office and State management agencies said.
The decision not to go ahead with plans for the country’s first all cargo airline comes as a suprise as the IPP Air Cargo had, as recently as two weeks before it decided not to seek an air transport business license, said,”There are now four converted aircraft lying in wait. We have all the investments in place, including key staff. We hope to fly as soon as we have a licence and are committed to serving the Vietnamese and FDI business communities.” The country’s first cargo airline had even unveiled an image of an aircraft bearing its own logo and brand colors.
IPP Air Cargo was founded by Imex Pan Pacific Group (IPP Group), which is one of the industry giants in Vietnam operating in many fields from high fashion, food, real estate, commercial mall management, non-aviation services, and duty-free shops. IPP Group was also one of the investors in the development of the Cam Ranh International Airport at a project cost of over 3,735 billion VND. The facility began operations in June 2018 with a capacity of 6-8 million visitors/year.
The company’s relationship with the aviation industry is not a coincidence but comes from the experience it gained through its various business operations and its desire to grasp a market opportunity. Vietnam currently does not have an airline specialized in cargo.
IPP Air Cargo is not the first airline in Vietnam to apply for a license and then go back on its decision. In 2020, Vinpearl Air founded by Vin Group decided to withdraw from the aviation market after more than 2 months of preparation and licensing.
Vin Group is a leading multi-industry corporation in Vietnam with investment in real estate, technology, trade and services. It owns a series of famous brands such as Vinhomes, Vincom, and Vinfast. The Group’s decision not to go ahead with establishing Vinpearl Air was because it wanted to focus on developing the technology – industry segment.
The interest shown by Vietnamese giants is good news for one of the fastest growing aviation markets in the world but the decision to withdraw from the market even before commencing operations has caused concern. However, it cannot be denied that Vietnam’s aviation market still has immense potential and offers many opportunities for investors and businesses.
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