Vietnam set to boost aviation investment

Vietnam’s aviation sector is set to receive a boost with the introduction of the 2025 Aviation Law, which strengthens aircraft finance protections and opens up clearer routes for airport investment, leasing, aviation services, and technology. The law, adopted by the National Assembly on December 10, 2025, replaces the 2006 legislation and provides a clearer legal foundation for aircraft financing, non-state airport investment, and cross-border aircraft operations.

The new law took effect on July 1, 2026, and is part of a wider push to modernize Vietnam’s aviation sector. The country has also revised its national airport plan, which targets a network of 36 airports with a combined annual capacity of over 249 million passengers by 2030.

Aircraft finance and investment are key areas of focus. The 2025 Aviation Law defines the routes available to foreign participants, including creditor remedies for aircraft finance, public-private partnership (PPP) or business-investment models for airports, service and infrastructure arrangements at airports, and minority ownership in Vietnamese commercial airlines. The law strengthens the legal basis for creditor remedies by expressly recognizing Irrevocable Deregistration and Export Request Authorisations (IDERAs) in primary legislation.

Article 21 of the law allows the Civil Aviation Authority of Vietnam (CAAV) to revoke an aircraft’s registration and airworthiness certificates and deregister it without prior approval from a Vietnamese court when implementing specified remedies for a registered IDERA holder. This provides stronger protections for aircraft lessors and financiers.

Private airport investment is also facilitated by the new law. The 2025 Aviation Law provides a clearer statutory framework for attracting non-state capital into Vietnam’s airports. Article 5 promotes freedom of business, fair competition, protection of foreign investors’ lawful interests, and diversified investment forms. Article 30 allows investment through public-private partnerships or business investment, subject to market-access and investor-selection rules.

Investors may develop dual-use works and improve public airport assets without transferring land-use or asset ownership. The law requires consultation with the Ministry of National Defence and Ministry of Public Security before determining the investment form.

The aviation industry is expanding.

Decree No. 208/2026/ND-CP introduces clearer requirements for fleet planning, aircraft leasing, and foreign ownership. Article 27 requires Vietnamese air transport enterprises to notify the CAAV of annual fleet plans by December 1 of the preceding year. Article 28 requires CAAV approval before leased or purchased aircraft enter civil aviation operations.

Article 26 permits AOC-holding airlines to wet lease up to 10 aircraft, with each aircraft leased from a foreign operator for no more than 12 consecutive months. This provides a temporary capacity solution for seasonal demand, maintenance, delivery delays, or other short-term gaps.

As the industry expands, opportunities for growth and development will arise, but challenges will also emerge, such as ensuring that the infrastructure can support the increased demand, and that businesses can adapt to the new regulations and requirements.

Opportunities in aviation services and technology are emerging. The 2025 Aviation Law identifies several areas as aviation-industry priorities, creating opportunities in manufacturing and MRO, technology, skills development, and sustainable aviation fuel (SAF). Article 5 provides a policy basis for tax, credit, and land incentives covering SAF research, production, import, distribution, use, and supporting infrastructure. Businesses can benefit from these incentives by investing in aviation services and technology.

Vietnam’s SAF market is developing alongside international decarbonisation requirements. Vietnam Airlines reported using around 2,200 tonnes of neat SAF in 2025, while Vietnam joined the voluntary phase of CORSIA from January 1, 2026. This creates potential opportunities across the SAF value chain, including production, import, certification, storage, blending, distribution, and airport refuelling infrastructure, which can be supported by investments in top investment destinations.

Businesses can approach the reforms across three timelines: act now to strengthen financing and fleet readiness, build a qualified pipeline by screening projects before committing capital, and update the business case by monitoring project-specific rules. By combining the new legal protections with careful transaction structuring and early regulatory engagement, investors will be best placed to benefit as Vietnam expands its airports and supporting aviation industries, including retail markets.