Vietnam Airlines to begin operation in equitization model

Thursday, Mar 12, 2015 17:34

Share holders of the Vietnam Airlines vote for the firm's development plan in the 2015-18 period.  — Photo courtesy of VNA
HA NOI (Biz Hub) — National carrier Vietnam Airlines (VNA) will officially start operations, following the model of an equitisation company, from April 1 this year.

This was announced at VNA's first meeting of shareholders held in Ha Noi on March 12.

At the meeting, the participants agreed to elect five members for the firm's board of members. Four of them are from the VNA: Chairman Pham Viet Thanh, CEO Pham Ngoc Minh, Nguyen Huy Trang, Luu Van Hanh. The remaining member is Nguyen Xuan Minh, Chairman of Techcom Securities–a subsidiary company of the Vietnam Technological and Commercial Bank (Techcombank).

Three others were also elected as members of the supervision board, including two VNA representatives, Mai Huu Tho and Hoang Thanh Quy, and Lai Huu Phuoc, who is head of the Vietcombank's Supervision and Examination Division.

Representatives from Vietcombank and Techcombank will participate in the VNA's operational management because the two banks have become large investors in the national carrier after buying a large chunk of VNA shares during its initial public offering (IPO) held last November.

Speaking at the meeting, Deputy Minister of Transport Nguyen Hong Truong, said the ministry highly values the parent VNA's equitization results.

"The equitization is an important step that will help modernize the firm, improve service quality and help realize its target to become one of the leading airlines in the region. I hope that VNA will have a trusted strategic partner, who will assist the firm in boosting its management capacity to successfully compete with rivals in the international market," said Truong.

VNA's shareholders also discussed and approved the VNA's operational plan and development strategy for the 2015 to 2018 period. They also selected an independent auditing company and approved of methods to offer stakes for strategic investors.

In talks with the Vietnam Investment Review last year, the Chairman of VNA, Pham Ngoc Minh, said strategic investors will be classified, based on their final tender offers with respect to the value and the volume of the stake they hold in the airline; and that the potential investors will include both airline businesses and financial organisations.

"Our approach towards finding strategic investors is that these investors need to accompany us in the long haul and promote our core aviation values," Minh stated.

For the 2015 to 2018 period, the VNA had set a target for maintaining its key role in domestic airlines transportation, as well as expanding its position in the Mekong sub-region. The firm plans to transport about 84.9 million passengers and about 976,600 tonnes of goods, with an annual growth of 16.1 per cent and 13.9 per cent, respectively.

The VNA will also target earning consolidated revenue of VND383.67 trillion (US$18 billion) during this period, with a pre-tax profit of more than VND9 trillion ($422.5 million). Of this, the parent VNA will contribute VND293.6 trillion (13.78 billion) in revenue.

In 2015, the firm plans to spend VND22.9 trillion ($1.07 billion), 2.44 times higher than 2014, for buying modern planes – an important aspect of VNA's plan to restructure its fleet and improve service quality for international standards of a 4-star level.

The VNA has been carrying out a brand recognition programme, which includes new planes, new staff uniform designs and new interior and exterior décor of various planes, as well as waiting, ticket and meeting rooms.— VNS

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