The driving force behind the establishment of IPP Air Cargo
Mr. Johnathan Hanh Nguyen – Chairman of the Board of Directors of Lien Pacific Group – IPPG said that Vietnam’s logistics has not yet exploited its full potential, currently, about 30,000 logistics enterprises are operating in Vietnam, but take up less than 20% market share, more last was hold by about 30 foreign companies. In the aviation sector, Vietnam has no carrier carrying specialized cargo, 88% of the market share is in the hands of international cargo airlines such as UPS, FedEx, DHL, Cathay Cargo, Airbridge Cargo.
Besides, Vietnam’s logistics system is not yet developed, the cost of transporting goods is always much higher than the world average, which leads to low competitiveness. Goods have to be moved around many ports, taking a long time in yards, driving up costs, thus reducing the quality of goods.
In the context of the deeply integrated economies, along with the tendency of supply chain shifting, logistics services are considered one of the fields with great potential and the strong breakthrough in Vietnam. Therefore, the goal of IPP Air Cargo Joint Stock Company is to establish a cargo airline operating domestically and internationally, with a total investment of 2,400 billion VND, equivalent to 100 million USD, of which 30% is equity capital and the remaining 70% is mobilized from other legal sources.
Develop a development plan in 2 stages
In the first stage (2021 – 2022), IPP Air Cargo will only operate in the domestic market as a transshipment partner. Currently, foreign cargo carriers are limited to only transporting goods into Vietnam at Tan Son Nhat and Noi Bai airports. IPP Air Cargo is negotiating for cooperation with foreign airlines, going on goods transportation to 16 airports in 16 different localities in Vietnam. In each locality, Bellazio Logistics – a chain of logistics centers built by IPPG will be responsible for managing the warehouses, connecting with IPP Air Cargo. The quantity of goods is expected to increase dramatically during this period.
In the second stage (after 2022), IPP Air Cargo will invest in a larger aircraft system along with other international air cargo carriers to fly overseas and cooperate in transporting goods from abroad to Vietnam. At that time, exporting goods from vegetables, fresh food, and other valuable export items will be transported by air, which reduces lead time in transit. In this period, IPPG will also construct logistics “hubs” in major cities in Vietnam to close the air freight chain system. Their project is expected that IPP will regain 38% of the logistics market for Vietnam.
IPP Air Cargo hopes to be approved for an investment project, obtain an air transport business license in the third quarter of 2021, and carry out commercial flights in the second quarter of 2022. This project of Mr. Johnathan Hanh Nguyen received a lot of consideration. It is expected to be a turning point, especially in the cargo transportation domain.