Private airline on track for Vietnam’s biggest ever aircaft delivery
VietJet Aviation Joint Stock, the Vietnam carrier, expects profit to surge 30 per cent this year on rising passengers as it prepares for its Ho Chi Minh City Stock Exchange listing debut in February.
A total of 23 overseas investors bought 66.5 million shares – equivalent to about 14 per cent of VietJet – during a pre-listing stake sale last month, the billionaire founder Nguyen Thi Phuong Thao said. The budget carrier is valued at US$1.2 billion by its advisers, and it is also considering a foreign listing and overseas bonds issuance, she said.
“The market is growing fast with rising traveling demand from a large population of young people and an expansion of the economy,” Ms Thao said in Ho Chi Minh City. “We gave investors a pretty good price – we prioritised quality investors over price,” she added, declining to give specific details on the stake sale.
The carrier is tapping into an aviation market that has risen 20 per cent in the past three years in one of the world’s fastest-growing economies, according to the airline. Vietnam’s economy grew 6.2 per cent in 2016, the second consecutive year of more than 6 per cent expansion.
The International Air Transport Association also forecasts Vietnam to be among the top five fastest-growing aviation markets in the next 20 years based on passengers. VietJet is expecting 30 per cent growth in passengers in 2017 after serving about 15 million travellers last year, Ms Thao said.
VietJet forecasts 2017 profit to rise 30 per cent from US$101.8 million in 2016, ashe said.
VietJet’s forecast also comes as shares of regional carriers slumped last year. The 17-member Bloomberg Asia Pacific Airlines Index is starting to recover from a 21 per cent slump in 2016, the first annual decline in three years and the worst performance since 2011. Oil last year capped its biggest annual gain since 2009, and jet fuel costs may rise.
Ms Thao sold shares at 84,600 dong each in the IPO, according to terms for the deal obtained by Bloomberg. Of the 14 per cent stake sold, half were from her and the rest were new shares, she said.
Before the stake sale, VietJet also sold a 10 per cent stake to three foreign investors – Wareham Group, Dragon Capital Markets and DC Developing Markets Strategies, according a ministry of transport permit to the airline obtained by Bloomberg.
VietJet, Vietnam’s only private airline, has the financial backing it needs to finance the country’s biggest ever aircraft order from both Airbus and Boeing, said Ms Thao.
VietJet, which is expanding its international routes, announced in May last year that it had ordered 100 Boeing 737 MAX 200 jets – worth $11.3bn at list prices – and months later placed a $2.4bn order with Airbus for 20 A321s.
The carrier had debt of 5 trillion dong (Dh813.6m) as of end-September, Ms Thao said.
The Capa Centre for Aviation has said that VietJet commands 40 per cent of Vietnam’s domestic market and it will probably surpass Vietnam Airlines this year as the country’s biggest domestic carrier.
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Updated: January 10, 2017 04:00 AM