Conglomerate Vingroup has withdrawn its proposal to establish Vinpearl Air, pulling out of the aviation market to focus on manufacturing.
The company submitted its withdrawal to the Ministry of Transport to focus on technology and industry, it stated Tuesday.
Vinpearl Air Flight Training Center, however, will remain operational to fulfill current student obligations, the statement added.
Further, the company said it will still participate in the construction and renovation of aviation infrastructure.
Nguyen Viet Quang, deputy chairman and CEO of Vingroup, said Vietnam’s aviation market is growing and holds potential, but includes big players.
“Heavy investment from Vingroup might lead to oversupply. We need to direct resources towards technology and industry development instead,” he explained.
Vingroup in July last year established Vinpearl Air Aviation Jsc with charter capital of VND1.3 trillion ($56.2 million).
It then signed an agreement with Canadian group CAE Oxford Aviation Academy to establish air training facilities to provide 400 pilots and technicians a year, seeking to improve Vietnam’s aviation staff shortage.
The conglomerate sought licensing for Vinpearl Air to commence flights in July this year, eyeing 30 aircraft by 2025. The proposal received support from the Ministry of Transport and Civil Aviation Authority of Vietnam.
Withdrawal from aviation reiterates Vingroup’s determination to concentrate on producing smartphones, electronics and vehicles.
The company had recently withdrawn from retail by transferring the largest supermarket and convenience store chain VinMart and VinMart+ to food producer Masan.
Vingroup’s move leaves Vietravel Airlines by tourism company Vietravel, and KiteAir by hospitality firm Thien Minh Group seeking operations approval.
Vietnam now has five commercial airlines, with state-owned Vietnam Airlines and budget airline Vietjet Air dominating. New player Bamboo Airways, operational for a year, low-cost carrier Jetstar Pacific and Vietnam Air Services Company (VASCO), make up the rest of the market.
Airports across Vietnam served near 116 million passengers last year, up 12 percent from 2018, according to Airports Corporation of Vietnam.