Vietnam Airlines CEO, Pham Ngoc Minh, recently announced that the company would be issuing public shares for the first time this November, offering 5% of shares to investors in order to raise $70.6 million, reports the Wall Street Journal.
The equitation of the government-owned airline has been in the works for over 7 years and has faced repeated delays. On April 2, Deputy Minister of Transportation, Nguyen Hong Truong, told the press that the IPO would be implemented in September “if [it] goes according to plan.”
The national carrier originally announced plans for its public offering back in 2007 but were put on the backburner after struggling to find consultants and then by the 2009 financial crisis.
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The move comes in the midst of massive fleet expansions by Vietnamese airlines who are seeking to make inroads in the SE Asian and international aviation markets.
“If it goes forward, the IPO could raise capital for expansion. Perhaps even more significantly, it would put Vietnam Airlines on a more even playing field with Southeast Asia’s other five main flag carriers, all of which are now publicly traded,” stated the Centre for Aviation, a leading global aviation news, analysis and research provider.
Vietnam Airlines currently offers services to 21 domestic airports and 28 international destinations.
In 2013, the airline hosted 14.7 million passengers, bringing in $3.45 billion in revenue (of which $25 million was profit).
The significance of the IPO goes beyond just Vietnam Airlines as it is being viewed as a test case for the privatization of other state-owned companies.
