Vietnam’s IPP Air Cargo eyes fleet of Airbus and Boeing 14 freighters
Soon-to-be-launched IPP Air Cargo is edging closer to its first flight as work nears completion on the conversion of its first freighter aircraft.
In an update, the airline’s operations, leasing and procurement advisor Brian Thomas Hogan said that work on its first B737-800 conversion was nearing completion at MRO Gameco.
He added that work is already underway on a second Boeing 737-800 and a third and fourth will follow soon after.
The carrier, which is part of billionaire businessman Johnathan Hanh Nguyen’ luxury goods retail firm Imex Pan Pacific Group (IPPG), will be the country’s only freighter airline when operations begin in the coming months.
The carrier plans to launch with four 737-800Fs but within three years hopes to add four A330-300Fs and six 777Fs, according to Hogan.
The move comes as many are expecting Vietnam to be one of the countries to benefit from a move to multisourcing operations where companies spread the risk of supply disruption by establishing a presence in more than one market.
When explaining the rationale behind the plans for a cargo airline, Hanh Nguyen pointed out that Vietnam’s air cargo market is dominated by foreign airlines, which have a market share of around 88%.
However, he said that under current rules foreign carriers are only able to import goods into two airports: Ho Chi Minh’s Tan Son Nhat International and Hanoi’s Noi Bai.
IPP Air Cargo would have the advantage of being able to offer services to multiple airports, he reasoned.
It will also offer domestic services to and from 16 airports in the country, which he hopes foreign carriers will also utilise.
The IPP Air Cargo aviation project has a total investment of VND2,400bn, about $100m, of which 30% is equity capital. The remaining 70% is mobilised money.
IPP Air Cargo anticipates transporting around 115,000 tons of cargo in the first year of operations, with a revenue of $71m. It aims to turn a profit in the fourth year.
In April, IPPG announced a partnership with other companies to establish a logistics business to support its soon-to-launch air cargo carrier.
IPPG said the new business, Bellazio Logistics, would primarily offer warehousing and storage of goods but would also provide road transport and cargo handling.
IPPG accounts for 51% of Bellazio Logistics’ charter capital with Sasco holding 10%, Viettel Post 10%, Vietnam Post 10%, Bellazio Trading Online 10%, and new air cargo carrier IPP Air Cargo with 9%.