Vietnam’s aviation sector will soon work under an amended Law on Civil Aviation that remodels almost all operations.

Vietnam’s aviation industry is gradually evolving into an integrated economic
sector that drives investment, tourism, logistics, and national competitiveness.
With the Law on Civil Aviation in place for nearly two decades, the industry’s legal
framework has become outdated and no longer aligns with current realities. The draft
Law on Civil Aviation (amended) is therefore considered a crucial step in
modernizing the legal framework for a new phase of aviation development.

With eleven chapters and 109 articles, the draft not only revises but fully
replaces the existing Law on Civil Aviation, covering State management mechanisms,
institutional authority, transport operations, infrastructure investment, and the
protection of passenger rights. The amendment is considered a strategic move, not
only to strengthen compliance with international aviation safety standards but also
to foster a transparent, competitive environment that encourages greater participation
from both domestic and foreign investors.

Holistic approach

A key focus of the draft is clarifying the responsibilities of State management
in civil aviation. Prepared by the Ministry of Construction (MoC), the draft clearly
delineates the roles of relevant agencies to separate oversight of safety, security,
and infrastructure – addressing overlapping mandates while aligning with recommendations
from the International Civil Aviation Organization (ICAO) on defining the functions
of each authority within the civil aviation management system.

The draft also modernizes regulatory methods, shifting from a pre-approval
and administrative control mechanism to a risk-based and post-audit management approach.
According to the MoC, more than 30 per cent of administrative procedures in the
aviation sector will be reduced or consolidated, with many processes shifted to
a “one-stop shop” model. Project appraisal, operations licensing, capacity certification,
and investment approval procedures are being streamlined to eliminate overlaps and
shorten processing times.

Most importantly, while the old legal framework mainly governed flight, transport,
and operational activities, the draft seeks to rebuild the entire aviation ecosystem,
from planning, investment, risk management, safety, and security to the application
of new technologies.

For the first time, Vietnam’s civil aviation law is being developed under a
holistic approach, where safety is embedded in development and development is secured
through robust institutions.

Opening for the private sector

One of the key innovations in the draft Law on Civil Aviation (amended) is
the expanded participation of the private sector in aviation infrastructure. Under
the existing law, only the State is permitted to invest in, own, and operate airports,
while the private sector can only participate in non-aviation services such as ground
operations, catering, logistics, or duty-free retail. This limitation has made many
airport projects dependent on State budget funding, resulting in slow progress and
restricted operational capacity.

As demand for aviation infrastructure grows rapidly, the draft allows private
investors to participate in the investment, management, and operation of airports
and aviation infrastructure through public-private partnerships (PPPs), concession
agreements, or the temporary transfer of management rights.

Specifically, the draft introduces a separate chapter on aviation infrastructure
resources, clearly stating that all economic sectors have the right to invest in
the construction, expansion, or upgrade of airports; to operate and conduct business
at aviation facilities under approved State mechanisms; and to ensure compliance
with technical, safety, and security standards required by the regulator. Institutionalizing
these models marks a major step towards “opening the institutional gates”, transitioning
aviation infrastructure from a State monopoly to a model of joint investment, joint
operation, and joint oversight.

According to the MoC, this not only mobilizes social capital for key infrastructure
projects but also fosters healthy competition between investors, thereby improving
service quality, reducing operating costs, and enhancing the efficiency of public
asset utilization.

To balance public-private interests, the draft specifies mechanisms for valuing
public assets, competitive bidding, and PPP contract monitoring. Every cooperation
project must clearly define the rights, obligations, and revenue risk-sharing mechanisms
between the State and investors. This is a significant improvement, as previous
PPP models often faced difficulties due to the absence of consistent standards for
reasonable returns or capital recovery.

In addition, the draft delegates greater authority to local governments in
proposing provincial airport projects aligned with regional development strategies.
Under the new rules, local authorities are empowered to prepare investment proposals,
submit them for government approval, and take responsibility for planning, site
clearance, and infrastructure connectivity. This approach links management responsibility
with development benefits, shortens approval timelines, and, in particular, benefits
regions with strong growth potential but limited central budget resources.

Notably, the draft expands the definition of “aviation infrastructure” to include
not only physical assets but also operational technology systems, information and
monitoring networks, air navigation safety facilities, and digital infrastructure
for operations. This broader definition provides a legal framework for investment
in “soft infrastructure” such as automated air traffic control systems, slot management
software, and operational data platforms – standard components of modern international
airports.

At the same time, the draft emphasizes transparency and oversight. All concession
or PPP contracts must publicly disclose their terms, duration, value, and independent
audit mechanisms. Investors are required to submit periodic reports on operations,
revenues, and costs, and remain under continuous supervision by State authorities.

Experts believe the new provisions on private investment in the draft Law on
Civil Aviation (amended) not only unlock new funding sources but also mark a breakthrough
in the sector’s development model. When all economic actors are allowed equal participation
in airport investment and operations, aviation infrastructure will no longer be
the exclusive domain of the State and will be an open economic ecosystem, where
the State plays an enabling role, enterprises manage operations, and society benefits
from improved services.

At a recent National Assembly session, many deputies agreed that codifying
this mechanism is essential for Vietnam’s aviation sector to keep pace with global
trends, with PPPs being quite common in developed markets. The model leverages social
resources while maintaining State control over areas related to the security, safety,
and sovereignty of national airspace.

New flight path

Alongside regulatory reform and investment liberalization, the draft also standardizes
passenger rights, mandates the transparency of flight information, and clearly defines
compensation mechanisms for delays and cancellations as well as on-time performance
requirements. An independent accident investigation mechanism has been introduced
to ensure objectivity and compliance with international conventions.

Notably, the draft emphasizes “green aviation” regulations, encouraging the
use of clean fuel, energy-efficient technologies, and emission reduction initiatives
in pursuit of Vietnam’s net-zero emissions by 2050 target.

While the draft is still under discussion, new airport projects involving private
enterprises are already beginning to emerge. The Xuan Truong Group, for example,
has proposed building a new airport in northern Ninh Binh province, to make it a
key hub for regional economic and tourism development, while the Sun Group subsidiary
SunPhuQuoc Airways has recently launched flight operations, marking the growing
presence of private investors in Vietnam’s aviation sector.

The rise of privately-invested airports is not only creating healthy competition
but also reshaping Vietnam’s aviation landscape. This points to a future in which
localities such as Ninh Binh may host modern, privately-operated airports, driving
local economic growth and strengthening the country’s transport infrastructure.

VET-Minh Kiet