The Transport Ministry has revoked the business license of Indochina Airlines
after the first private airline to operate flights in Vietnam showed no activity for the past year.
According to the Civil Aviation Authority of Vietnam, who had proposed that the ministry revokes the license, Indochina Airlines has no clear intention to resume its activities, VnExpress reported.
The decision was issued after the company's general director Ha Dung, also a popular songwriter, was prohibited from leaving the country because his beleaguered company owes more than US$1.3 million to a local bank.
A Ho Chi Minh City Court in November ordered that if Indochina Airlines cannot pay its debt to Asia Commercial Bank (ACB), composer Ha Dung, whose full name is Ha Hung Dung, will be required to make the payment personally as he is the company's general director.
The court decided that Indochina Airlines must pay its debt of $1.19 million plus interest ($1.3 million in total) by July 27, 2012. Dung had previously signed an agreement that he would pay the debt personally if his company could not.
According to the verdict, Indochina Airlines and ACB signed a contract to open a letter of credit.
Under request by Indochina Airlines, ACB paid $1.19 million to Komercni Banka A.S in the Czech Republic on behalf of the airline on January 12 last year.
The bank debited the amount to Indochina Airlines' account by the due date of August 12 last year with a monthly interest rate of 6.5 percent for payments made by the due date and 9.7 percent for late payments.
However, the airlines didn't pay the bank despite being notified several times, the court heard.
Indochina Airlines was set up in May 2008 and launched its first flight six months later, with two Boeing 737-800 airplanes wet-leased from Travel Service in Czech Republic.
However, the airlines halted all flights a year later due to financial difficulties. Since then, many of its agents and partners have requested payment and many have asked that the airlines' license be revoked.
In November 2009, the company's last airplane left Vietnam and two months later, the Civil Aviation Authority of Vietnam (CAAV) revoked the company's right to transport passengers in Vietnam, saying it had failed to show the required capital.