Fledgling Vietnamese carrier Bamboo Airways moved a step closer to starting operations on Tuesday as the government said it would authorise the transport ministry to issue it with an aviation licence.
Privately owned FLC Group last month agreed a $5.6 billion deal to buy 20 Boeing Co planes at current list prices and in March signed a memorandum of understanding with Airbus for up to 24 planes.
The government said on Tuesday that Bamboo Airways will invest 700 billion dong ($30 million) during 2019-2023 on 10 Airbus or Boeing planes, but it was unclear whether it would rent or buy planes initially.
It will become Vietnam’s fifth airline. It has yet to receive an aviation licence but the government said in a statement on Tuesday that it had authorised “The Ministry of Transportation to evaluate and issue an air transport business license in accordance with the law.”
FLC has said it expects the airline to begin operations in 2019 and launch direct flights to the United States and Europe and position itself as a hybrid airline, combining traditional and low–cost models, the company said in a statement on Tuesday.
Vietnam’s four airlines are flag carrier Vietnam Airlines ; budget operator Jetstar Pacific Airlines which is partly owned by Vietnam Airlines; budget carrier Vietjet Aviation and Vietnam Air Services Co.
The country’s airport capacity has been reaching its limits as fast economic growth means more people in the nation of 90 million are taking flights.
Hanoi-based FLC, whose main businesses are housing, resorts and golfing, had said it planned to operate international flights through Bamboo Airways to tourist spots in Vietnam including where FLC has properties and also plans domestic flights.