HANOI -- Vietnam's first all-cargo airline, led by local retail conglomerate Imex Pan Pacific Group, aims for launch as early as 2022 to take advantage of soaring demand in the air freight market.
The group known as IPPG will establish IPP Air Cargo at a capitalization of 2.4 trillion dong ($104 million). IPPG will take a 30% stake while other investors hold the rest.
IPPG sees a ripe opportunity to capture air cargo demand, which has surged during the coronavirus pandemic. Foreign rivals dominate nearly 90% of Vietnam's market, the group said.
"Exporting businesses are facing serious difficulties," IPPG Chairman Johnathan Hanh Nguyen said, citing the lack of competition in the air freight market and high transport costs. Nguyen indicated his intent to reduce shipping rates.
IPP Air Cargo will become operational once it obtains government approval, expected as soon as next year. The company will begin with five aircraft, expanding to 10 in the third year. It aims to attain profitability within three years.
The new cargo line plans to establish routes connecting domestic airports to Noi Bai International in Hanoi and to Tan Son Nhat International in Ho Chi Minh City. IPP Air Cargo looks to team up with foreign companies to export Vietnamese fruit and frozen marine products.
Vietnamese exports jumped 28% on 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 looking to their freight operations to lift earnings.