Vietnam’s first all-cargo airline nears take-off
(Nikkei Asia) – Vietnam’s first all-cargo airline, led by local retail conglomerate Imex Pan Pacific Group, is targeting a launch as early as 2022 to take advantage of strong demand in the air cargo market.
The group known as IPPG will create IPP Air Cargo with a capitalization of 2,400 billion dong (104 million dollars). IPPG will take a 30% stake while other investors will hold the rest.
IPPG sees a ripe opportunity to capture demand for air freight, which has increased during the coronavirus pandemic. Foreign rivals dominate nearly 90 percent of the Vietnamese market, the group said.
“Exporting companies are facing serious difficulties,” said IPPG President Johnathan Hanh Nguyen, citing the lack of competition in the air freight market and high transportation costs. Nguyen has indicated his intention to reduce shipping rates.
IPP Air Cargo will become operational once it obtains government approval, expected as early as next year. The company will start with five planes, and grow to 10 in the third year. Its objective is to achieve profitability within three years.
The new freight line plans to establish routes connecting domestic airports to Noi Bai International in Hanoi and Tan Son Nhat International in Ho Chi Minh City. IPP Air Cargo is seeking to partner with foreign companies to export Vietnamese fruit and frozen seafood.
Vietnamese exports jumped 28% over the year to $ 157 billion for the first half of 2021, according to the country’s General Statistics Office. As the pandemic continues to depress passenger demand, carriers such as Vietnam Airlines are turning to their cargo operations to boost their revenues.
This story was first published in Nikkei Asia.
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