VietJet expects delivery of one of the largest aircraft orders in aviation history

[Viet]

VietJet CEO Nguyen Thi Phuong Thao

Photographer

By My Pham | HO CHI MINH CITY

HO CHI MINH CITY Vietnamese budget carrier VietJet has revived plans for an overseas listing after a domestic IPO last month that gave it a value of $1.2 billion. Vietnam's only privately owned airline may consider listing on either the Singapore, Hong Kong or Tokyo bourses, CEO Nguyen Thi Phuong Thao, the nation's first female billionaire, told Reuters in an interview on Tuesday.

"VietJet hopes to become Vietnam's first company to successfully go to the international capital market," Thao, who founded the airline in 2007, said.

The airline had earlier planned an overseas listing by early last year, but reports said the plan was put on ice. Thao did not cite a timeline for the listing. Singapore sovereign wealth fund GIC and a Morgan Stanley investment fund are among 26 foreign investors who have bought a combined 24 percent stake in VietJet in recent placements, Thao said. The carrier's shares will start trading in the domestic market in February.

Investors have sought exposure to an airline that is expected to own the biggest share of the domestic market this year, amid strong air travel growth in the Southeast Asian nation. The firm, which is expanding its international routes, has the financial backing it needs to finance the country's biggest ever aircraft order from both Airbus (AIR.PA) and Boeing (BA.N), Thao said.

It announced in May last year that it had ordered 100 Boeing 737 MAX 200 jets - worth $11.3 billion at list prices - and months later placed a $2.4 billion order with Airbus for 20 A321s.

VietJet currently operates about 60 routes both locally and internationally, and expects to have a fleet of 200 aircraft by 2023, Thao said. The CAPA Centre for Aviation has said that VietJet commands 40 percent of Vietnam's domestic market and it will likely surpass Vietnam Airlines HVN.HNO this year as the country's biggest domestic carrier.

VietJet's net profit is expected to climb 30 percent in 2017, after its bottomline almost doubled over the past 12 months, Thao said. It had debt of 5 trillion dong ($221.53 million) as of end-September.


http://www.reuters.com/article/us-airlines-vietjet-finance-idUSKBN14U18A
(Reporting by My Pham; Editing by Muralikumar Anantharaman)

 

[Viet]

first Airbus aircraft are delivered. welcome

 

[GS Zhou]

after a domestic IPO last month that gave it a value of $1.2 billion.

It announced in May last year that it had ordered 100 Boeing 737 MAX 200 jets - worth $11.3 billion at list prices - and months later placed a $2.4 billion order with Airbus for 20 A321s.

A 1.2B USD worth company wants to purchase something that worth 13.7B USD? Sounds very weird.

 

[Viet]

A 1.2B USD worth company wants to purchase something that worth 13.7B USD? Sounds very weird.

not really. first, like other big buyers, VietJet receives a discount on the list price. second, the purchase is paid by instalments not in one sum. third, the company will issue new shares and bonds.

http://www.boeing.com/commercial/customers/vietjet-aviation/vietjet-737max-order-05-22-16.page

 

[Nike]

A 1.2B USD worth company wants to purchase something that worth 13.7B USD? Sounds very weird.

it can be through lease-purchasing scheme with major consortium financier work from behind to excluded them from beurocracy red tape in Vietnam

 

[GS Zhou]

not really. first, like other big buyers, VietJet receives a discount on the list price. second, the purchase is paid by instalments not in one sum. third, the company will issue new shares and bonds.

http://www.boeing.com/commercial/customers/vietjet-aviation/vietjet-737max-order-05-22-16.page

I understand the existence of big buyer discount, bank loan, bonds, new share issue, etc. But given the small-scale of this company, it still looks very weird and risky.

Lets see how it goes.

 

[Viet]

it can be through lease-purchasing scheme with major consortium financier work from behind to excluded them from beurocracy red tape in Vietnam

That is what the state owned Vietnam airlines does. Acquiring more aircraft through a leasing company. The private airliner VietJet acts differently. It is a leasing company. It leases aircraft to other airliners. Also it is a reseller. It buys aircraft with discount and resells them with profit to other smaller players.

I understand the existence of big buyer discount, bank loan, bonds, new share issue, etc. But given the small-scale of this company, it still looks very weird and risky.

Lets see how it goes.

VietJet bets on expanding domestic and international markets. Yes it is a bet. It can be very risky.

 

[TaiShang]

That is what the state owned Vietnam airlines does. Acquiring more aircraft through a leasing company. The private airliner VietJet acts differently. It is a leasing company. It leases aircraft to other airliners. Also it is a reseller. It buys aircraft with discount and resells them with profit to other smaller players.


VietJet bets on expanding domestic and international markets. Yes it is a bet. It can be very risky.

Why expand so fast, so aggressively? Hopefully, the company plans to launch lots of new routes to destinations near and far -- lots of to China and other big tourist generating markets in NEA.

 

[Imran Khan]

Best of luck

 

[Shotgunner51]

A 1.2B USD worth company wants to purchase something that worth 13.7B USD? Sounds very weird.

Technically many options, a dry-lease in Ireland, or a financial lease in Hong Kong. But even so the expansion plan is indeed quite aggressive, that's one reason why they must list in an international capital market for credibility, Hong Kong or Singapore are ideal. Anyway they got GIC (Singapore SWF) backing and guidance, path should be smooth.

 

[Viet]

Why expand so fast, so aggressively? Hopefully, the company plans to launch lots of new routes to destinations near and far -- lots of to China and other big tourist generating markets in NEA.

Imagine you are vietnamese wanting to drive from Hanoi to Saigon by car, then you will soon realize that doesn't make fun at all.

right now Vietnam highways are still underdeveloped. If you take a train, thing gets worse because railroads are in a bad shape. people prefer air travels because cheaper and faster. It will take another 10 years at least to get highways and railroads upgraded to an acceptable level. Air travels in VN grows at 20-30pct a year.

VietJet starts flying to China, Taiwan, Thailand and many other destinations.

 

[hoangsa74]

vietjet is a military-owned/backed company, they do not need to make a profit. I flew on vietjet from Saigon to phu quoc and most of plane was empty and interestingly enough; the same route has at least 10 flights per day with very few people were waiting at the domestic terminals for departure. My first impression with vietjet is that their economy seats (and Vietnam airlines too) are very spacious and much more comfortable than any airlines I have ever flown with. With other American or hong kong airlines you must pay more than economy to have a spacious seat like vietjet or Vietnam airlines. when I flew china southern airlines I noticed the seats were spacious like vietjet and Vietnam airlines as well.

I consider vietjet and Vietnam airlines to be very safe airlines to fly with because their planes are brand new with low flight hours and mileage. on my trip back to Saigon from phu quoc, there was heavy rain and all flights were grounded; I like this kind of safety measure. Unlike in the west, airlines just fly into a thunderstorm trying to beat the odd.

 

[Viet]

vietjet is a military-owned/backed company, they do not need to make a profit. I flew on vietjet from Saigon to phu quoc and most of plane was empty and interestingly enough; the same route has at least 10 flights per day with very few people were waiting at the domestic terminals for departure. My first impression with vietjet is that their economy seats (and Vietnam airlines too) are very spacious and much more comfortable than any airlines I have ever flown with. With other American or hong kong airlines you must pay more than economy to have a spacious seat like vietjet or Vietnam airlines. when I flew china southern airlines I noticed the seats were spacious like vietjet and Vietnam airlines as well.

I consider vietjet and Vietnam airlines to be very safe airlines to fly with because their planes are brand new with low flight hours and mileage. on my trip back to Saigon from phu quoc, there was heavy rain and all flights were grounded; I like this kind of safety measure. Unlike in the west, airlines just fly into a thunderstorm trying to beat the odd.

you mistook VietJet with VietTel. the latter is controlled by the army.