The group's newly created unit, Vinpearl Air, has submitted the application with the Department of Planning and Investment of Hanoi, reported online newspaper VnExpress.

Vinpearl Air, with an investment of 4.7 trillion dong ($202.56 million), is keen to start flying from July next year, with an initial fleet of six. The unit plans to expand its fleet to 36 by 2025, the report said, citing application details.

A Vingroup spokesman declined to comment.

Vinpearl Air Chairwoman Nguyen Thanh Huong told another local newspaper that the firm is "finalising procedures to establish the airline".

Vingroup, once a real estate and retail conglomerate, has grown to become Vietnam's largest listed firm with a market capitalisation of more than $16 billion. The company recently launched smartphones and cars, and is also looking to foray into artificial intelligence.

If licensed, Vinpearl Air would use narrowbody planes such as the Airbus SE A320 or Boeing Co 737 and widebodies such as the A330, A350 or 787, the VnExpress report said.

The Civil Aviation Authority of Vietnam told the Ministry of Transport in a note on Wednesday that Vinpearl Air is "qualified" to operate 30 aircraft by 2025, the report said.

Civil Aviation Authority of Vietnam did not immediately respond to Reuters' request for comment.

Last month, Vietnam's top tour operator Vietravel said it was also seeking funds for its project to launch an airline.

In January, property and leisure firm FLC Group's Bamboo Airways launched its maiden commercial flight to become the fifth Vietnamese airline, heightening competition in the aviation sector of the Southeast Asian nation, which is emerging as a popular tourist destination.

The launch plans come at a time aviation competition in Vietnam is heating up and its aviation infrastructure is getting overloaded. Other local airlines operating are Vietnam Airlines, Jetstar Pacific Airlines, Vietjet Aviation and Vietnam Air Services Co.

($1 = 23,203 dong)

(Reporting by Khanh Vu, Editing by Sherry Jacob-Phillips)