Vietravel Airlines plans 6-fold increase in charter capital by 2025
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Rookie carrier Vietravel Airlines wants to gradually increase its charter capital nearly sixfold to VND7.64 trillion ($323.66 million) by 2025.
The airline recently made this proposal to the government after two years of operating with a charter capital of VND1.3 trillion. It owns three narrow-body Airbus A321 jets.
Viettravel made this proposal to boost development and enlarge its fleet, Chairman Nguyen Quoc Ky said.
“Investing in fleet expansion is important for a new airline to survive and grow,” said Ky. “Only with a large fleet can we make profits.”
For the last two years Vietravel Airlines has not been profitable but it expects that with a larger fleet it can take advantage of an expected surge in demand after Covid-19.
The capital increase will come from a combination of shareholder investment, selling stakes to other investors, and financial tools.
Shareholders of Vietravel Airlines plan to invest an additional VND700 billion by 2025, bringing their total investment to VND2 trillion.
The airline also plans to increase its charter capital to VND8.25 trillion by 2030.
Viettravel projects that by 2030, if business is favorable, it could record a VND2.2 trillion in accumulated profit which it could use it to pump up its capital.
Questions & Answers
Q.What is the primary reason Vietravel Airlines wants to increase its charter capital?
What is the primary reason Vietravel Airlines wants to increase its charter capital?
The airline intends to boost development and enlarge its fleet. Chairman Nguyen Quoc Ky stated that fleet expansion is crucial for a new airline's survival and growth, believing a larger fleet is necessary to make profits.
Q.How will Vietravel Airlines fund the proposed increase in charter capital?
How will Vietravel Airlines fund the proposed increase in charter capital?
The capital increase will be funded through a combination of shareholder investment, selling stakes to other investors, and financial tools. Current shareholders plan to invest an additional VND700 billion by 2025.
Q.Has Vietravel Airlines been profitable in its initial years of operation?
Has Vietravel Airlines been profitable in its initial years of operation?
No, Vietravel Airlines has not been profitable for the last two years. The airline anticipates that a larger fleet will allow it to capitalise on an expected surge in demand post-Covid-19.
Q.What is the airline's long-term capital increase target beyond 2025?
What is the airline's long-term capital increase target beyond 2025?
Beyond 2025, Vietravel Airlines plans to increase its charter capital to VND8.25 trillion by 2030. If business conditions are favourable, it projects using accumulated profit to further boost capital.
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