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 With the Law on Civil Aviation in place for nearly two decades, the industry’s legal framework has become outdated and no longer aligns with current realities.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.
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