Vietnam Airlines Corp officially set up a new airline based on the restructuring of its subsidiary Vietnam Air Services Co (VASCO), the national carrier said in a press release on March 7.

Illustrative photo (Source:VNA)

The new airline will be named VASCO and has a minimum charter capital of 300 billion VND (13.43 million USD) and about 10 airplanes.

Vietnam Airlines will hold 51 percent of the venture, while the Viet Nam Technological and Commercial Joint Stock Banks (Techcombank) will have a 49 percent stake.

As soon as the airline is established, Techcombank will make an initial investment of 147 billion VND, while Vietnam Airlines will provide aircraft and other assets worth about 157 billion VND.

Vietnam Airlines said the assets will be valued by the Vietnam Valuation and Finance Consultancy Jsc (VVFC) under the Ministry of Finance.

A representative from Techcombank will be appointed as VASCO’s chairman, while the Chief Executive Officer of VASCO will be from Vietnam Airlines.

In its first stages, VASCO will continue to operate ATR72 aircrafts on domestic routes not capable of handling jet airplanes, such as to Con Dao, Ca Mau, Rach Gia and Dien Bien.

The move comes as Vietnam Airlines continues to lose its domestic market share to the low-cost VietJet Aviation Joint Stock Co. Currently, Vietnam Airlines also holds 70 percent of stake in another low-cost carrier, Jetstar Pacific Airlines.

According to the International Air Transport Association, Viet Nam is expected to become one of the world’s top 10 fastest growing aviation markets in the next two decades.

(Source: VNA)