Viet Nam's IPP Air Cargo calls it quits

 IPP Air Cargo (Da Nang) has confirmed its plans to launch as Viet Nam's first dedicated freight airline have now been shelved with Jonathan Hanh Nguyen, chairman of the airline’s parent company, Imex Pan Pacific Group (IPPG), blaming global uncertainty, as well as declining freight demand resulting in a fall in freight prices. Notably, the start-up had already acquired four B737-800(BCF)s.

Multiple Viet Nam-based media outlets are reporting an extraordinary meeting of shareholders was held on October 26 when shareholders requested that the start-up formally withdraw its various licensing applications. The following day, the withdrawal documentation signed by IPP Air Cargo CEO Le Hong Thuy Tien was forwarded to the relevant local authorities.

The correspondence cited the escalation of the Russia - Ukraine conflict, the unstable and volatile global cargo market, rising inflation, interest rates, and fuel prices, and the risk of a global recession as reasons why the shareholders had decided to pull the rug from under the start-up airline.

IPPG, helmed by husband and wife duo Hanh Nguyen and Thuy Tien, has a 70% stake in IPP Air Cargo. There are three other shareholders - Duy Anh Commerce, Le Hong Thuy Tien (in a direct shareholding), and Nguyen William Hieu. The shareholders had invested VND2.48 trillion dong (USD100 million) into the airline, of which 30% was equity and 70% was mobilized capital.

Hanh Nguyen told the VnExpress news outlet that air cargo demand would keep declining because of widespread economic uncertainty. In turn, that has resulted in freight prices falling and the market becoming more competitive for cargo airlines. Previously, Hanh Nguyen had talked up IPP Air Cargo's prospects as Viet Nam's only homegrown dedicated freight airline, saying it would enjoy access to local markets and airports that international competitors did not have.

Recently, IPP Air Cargo encountered difficulties finalizing its licencing and business permits, having to negotiate multiple bureaucracies. There were also questions asked about the citizenship status of some of the shareholders.

As reported by ch-aviation, IPPG had acquired four B737-800BCFs for their new airline and recently went to the trouble and expense of converting them earlier. Neither Hanh Nguyen nor Thuy Tien mentioned their immediate plans for those planes when announcing that their airline wouldn't take off. The affected aircraft are msn 33567 (formerly registered as EI-DCI), msn 33804 (formerly EI-DCF), msn 33805 (formerly EI-DCG), and msn 33552 (formerly EI-DAR).

However, Thuy Tien did tell the Vietnamese authorities that when the global economy shows some signs of recovery and stabilisation, IPPG will consider returning to the air freight business, including restarting the licensing process.

ch aviation