Vietnam’s Game-Changer: Foreign Ownership Cap in Airlines Set to Soar from Thirty-Four to Forty-Nine Percent, Unlocking Global Growth!

Written By: Shreya Saha

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May 13, 2026 11:14 GMT+5:30

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Vietnam’s aviation sector is on the verge of a significant transformation with a proposed draft decree from the Ministry of Construction. This decree aims to increase the foreign ownership cap in domestic airlines from the current 34% to 49%. The move, designed to bring Vietnam’s aviation policies in line with its international free trade agreements, is seen as a key step to improving the financial health of local airlines, gaining access to advanced global technologies, and ensuring expertise transfers that can strengthen their operations and competitiveness on the global stage.

Currently, the foreign ownership cap has long been a point of contention, as it restricts large-scale foreign participation in the country’s aviation industry. The proposed cap increase would allow foreign investors to hold up to 49% of the charter capital in Vietnamese airlines. However, the regulation will still require that domestic shareholders hold at least 51%, thus ensuring that national control over the aviation sector remains intact.

As Vietnam’s aviation industry faces increasing competition and rising operational costs—largely due to the fluctuating price of jet fuel and the growing need for fleet modernization—the increase in foreign ownership is expected to allow airlines to attract the much-needed capital and strategic partnerships. These partnerships will help to enhance their financial positions, improve fleet management, and elevate customer service quality, ultimately benefiting the entire aviation ecosystem.

Key Domestic Airlines and Foreign Ownership Breakdown

As of mid-2026, the foreign ownership stakes in Vietnam’s largest carriers are varied. The draft decree, if passed, could lead to a significant shift in these ownership structures, allowing for greater foreign participation across the board. Let’s examine the current ownership breakdown and foreign stakes of some of Vietnam’s major airlines:

1. Vietnam Airlines (Flag Carrier)

• Ownership Status: Vietnam Airlines is predominantly state-owned and controlled by the Vietnamese government through the State Capital Management Committee.
• Foreign Investment: The airline has a minority foreign stake held by Japan’s ANA Holdings, which owns about 5-9% of the airline. Other minor institutional investors also hold small foreign shares.
• Control: Despite foreign investment, the Vietnamese state maintains majority control, holding between 50-80% of the airline’s shares. This guarantees that national interests continue to dictate the airline’s operations.

2. VietJet Air (Private Carrier)

• Ownership Status: VietJet Air is a private carrier, predominantly owned by Sovico Holdings, with significant local investor involvement, including the airline’s CEO.
• Foreign Share: In 2023, VietJet’s foreign ownership was limited to about 17%, in line with the current 34% cap. The remaining shares are controlled by domestic investors, including Sovico and HDBank.
• Control: Due to the existing foreign ownership restrictions, VietJet does not have a large strategic foreign partner and remains largely under domestic control.

3. Bamboo Airways (Private Airline)

• Ownership Status: Bamboo Airways was founded in 2018 and is a private carrier that has undergone restructuring in recent years. Domestic entities, such as Him Lam Group, have acquired significant stakes.
• Foreign Share: As of 2026, Bamboo Airways does not disclose major foreign shareholders, and the airline remains primarily owned by Vietnamese investors. Foreign investments have been limited due to the existing ownership cap.

4. Pacific Airlines (Formerly Jetstar Pacific)

• Ownership Status: Pacific Airlines operates as part of the Vietnam Airlines Group, which controls the low-cost carrier.
• Foreign Share: There is no significant foreign ownership, as Pacific Airlines is entirely controlled by Vietnam Airlines, which is itself a state-owned entity.

5. Vietravel Airlines

• Ownership Status: Vietravel Airlines is a privately owned carrier, initially founded by Vietravel Holdings and later controlled by T&T Group.
• Foreign Share: The airline remains entirely under Vietnamese control, with no known large foreign stakeholders.

6. VASCO (Vietnam Air Services Company)

• Ownership Status: VASCO is a subsidiary of Vietnam Airlines.
• Foreign Participation: There is no foreign ownership, as it is a fully state-owned subsidiary.

7. Sun PhuQuoc Airways (New Entrant)

• Ownership Status: Sun PhuQuoc Airways is backed by the Sun Group, a major Vietnamese conglomerate.
• Foreign Share: The ownership structure has not been publicly disclosed, but it is known that the airline is primarily funded by domestic investors.

The Benefits of Raising the Foreign Ownership Cap

The proposed increase in the foreign ownership cap from 34% to 49% represents a strategic step toward leveraging the advantages of foreign investment and expertise. While maintaining national control, this policy change can provide several benefits to Vietnam’s aviation industry:

1. Access to Capital and Financial Stability

Raising the foreign ownership cap will allow Vietnamese airlines to attract substantial investments from global aviation players, thus helping to alleviate financial pressures. Aviation is a capital-intensive industry, and foreign investors can provide long-term, stable funding that will enable airlines to modernize fleets and expand operations. Such investment is crucial, particularly in a market where airlines must keep up with growing demand for domestic and international travel.

2. Transfer of Expertise and Technology

Foreign investors often bring not only financial resources but also advanced operational expertise and technology. Airlines will be able to tap into these benefits, such as better fleet management systems, enhanced customer service technologies, and more efficient digital booking platforms. This will help Vietnamese carriers improve operational efficiency, optimize customer experience, and stay competitive in a fast-growing ASEAN market.

3. Increased Competitiveness

A greater foreign stake in domestic airlines is expected to increase market competitiveness. With foreign capital comes better operational practices, wider networks, and improved customer service standards. This will likely result in expanded route networks, enhanced in-flight services, and better pricing options. Competition would ultimately benefit the passengers by offering more flight choices and competitive fares.

4. Maintaining National Control

Despite the increase in foreign ownership, the Vietnamese government has designed safeguards to ensure that the control of airlines remains in national hands. Provisions such as reserving key board seats for domestic shareholders and allowing domestic veto powers in critical decisions ensure that foreign investors cannot dictate major policy changes. These provisions will safeguard national interests, while still benefiting from the expertise and resources that foreign investments can bring.

What This Means for Passengers

The proposed increase in foreign ownership is expected to have several positive impacts on passengers, improving their overall travel experience:

1. More Flight Options

With the influx of foreign capital, airlines will be better equipped to expand their routes and increase flight frequencies. This will open up more travel options for passengers, allowing for greater flexibility in travel plans.

2. Improved Service Quality

Foreign investors often bring global standards of customer service, including better in-flight amenities, staff training, and modern customer service protocols. As a result, passengers can expect to see improvements in overall service quality, making air travel more enjoyable.

3. Potential Price Competition

Although not guaranteed, increased competition from foreign-backed carriers often leads to more competitive pricing. Airlines with foreign participation may offer lower fares over time as they scale up operations, improve efficiency, and compete for market share.

4. Better Connectivity

Foreign ownership can facilitate code-share agreements and airline alliances, expanding connectivity for passengers. This means that travelers can benefit from better access to global networks, making it easier to book international flights and connect to other destinations with seamless travel experiences.

5. Fleet Modernization and Safety

Foreign investment can accelerate fleet modernization by introducing advanced technologies that improve operational efficiency and safety. These upgrades will enhance flight safety, fuel efficiency, and operational reliability—ultimately benefiting passengers.

Conclusion

The proposal to raise Vietnam’s foreign ownership cap from 34% to 49% is a strategic move that aims to unlock the potential of the country’s aviation industry. By attracting foreign capital and expertise, the Vietnamese aviation sector will be better equipped to compete on a global scale, modernize its fleets, and improve service quality. With careful safeguards in place to maintain national control, this policy change has the potential to transform the sector and benefit passengers with more flight options, better service, and improved connectivity.

As the draft decree moves through the regulatory process, Vietnam’s aviation industry may be on the cusp of a major transformation, with foreign investment playing a critical role in shaping its future growth and competitiveness in the international market.

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