A draft aviation decree proposes raising the foreign ownership cap in Vietnamese airlines to a maximum of 49 percent from the current 34 percent, local news outlet Tuoi Tre has reported.
The Ministry of Construction, which is floating the draft decree, has said the higher cap would help airlines bring in more foreign capital, management expertise, and operational experience, according to the article.
This is a promising sign for the local aviation industry, which is thirsty for capital; however, it’s not at all clear that this is likely to happen.
For one, this has been floated before but was never fully realised.
Back in 2018, the MoIT floated the idea of raising foreign ownership caps, which were at the time 30 percent, to 49 percent.
This was not approved; however, in November of 2019, the cap was increased to 34 percent.
Though this was generally rebuffed as not really good enough by key industry players.
Who doesn’t want it?
Vietnam Airlines has also historically been against the idea.
The state-controlled airline said back in 2018 that it was concerned that a foreign firm owning 49 percent would give it effective control over the airline’s board.
This was, however, rejected by the MoIT, according to Tuoi Tre’s reporting.
Notably, majority state ownership can often prioritise national strategic considerations over commercial optimisation, and this might be difficult to do with significant foreign ownership.
More recently, in July of 2024, Vietnam’s Planning and Investment Ministry rebuffed a similar call from the MoIT, concerned that it would restrict local airlines’ ability to attract foreign strategic partners, to improve their administration, and expand their international networks to increase their market share.
This stands in stark contrast to the MoIT’s arguments for the change.
Note, however, the MPI has now been absorbed into the Ministry of Finance, though it’s not clear if this will have changed anything, yet.
Who wants it?
Bamboo Airways has been a vocal proponent of raising the foreign ownership cap more or less since its inception.
Specifically, it has said that there is a lot of interest in the local industry from abroad, but the current 34 percent cap restricts foreign investors’ decision-making ability and leaves them without veto rights.
“This makes investing in Vietnam’s aviation industry highly risky,” the airline is quoted as saying.
Vietjet was also pushing for an increase to the cap back in 2017.
Outside of the industry, Dr Chu Thanh Tuan, Associate Program Manager of the Undergraduate Business Program at RMIT Vietnam, also weighed in in May of 2025.
“Foreign investors need control for long-term profits, but a 34 per cent cap offers little incentive,” he is quoted as saying in an RMIT media release.
The release also notes that Vietnam’s 49 percent cap is significantly lower than Thailand and Indonesia, which cap foreign ownership at 49 per cent, and the Philippines, where foreign ownership can go as high as 100 per cent.
What’s likely to happen?
Of note, the government owns about 84 percent of the shares of Vietnam Airlines, so even if the cap were lifted, it is not possible for a foreign investor to acquire enough to have any sort of significant sway over its operations — that is, without the government relinquishing a significant portion of its shares.
The point being that concerns foreign investors might have undue influence over the national carrier seems unfounded.
By contrast, however, private carriers, like Vietjet and Bamboo Airways, may be able to attract significant outside capital and expertise to boost their operations, making themselves more competitive, and this may pose a threat to Vietnam Airlines’ operations.
On that note, Vietnam Airlines’ state ownership has the potential to give it outsized sway over policymakers relative to its peers, so without the airline on board, it seems reasonable to assume that it will be challenging to see this move forward.
That said, the airline hasn’t commented one way or the other as yet.