Carrier moving ahead with plans to raise $800 million from listing sometime this year.
Budget carrier Vietjet Air plans to raise $800 million in its initial public offering (IPO) scheduled to take place at the end of this year, according to CEO Luu Duc Khanh, though no detailed schedule has been released.
Mr. Khanh said last year that Vietjet Air would conduct its IPO after turning a profit and it could be held in Hong Kong or Singapore.
The funds raised from the IPO would be spent on new aircraft. Vietjet Air currently owns 20 Airbus A320s and is planning to buy six to ten more each year under a contract to purchase a total of 63 from the European manufacturer, Mr Khanh was quoted by foreign media as saying. Worth $6 billion, customers often receive a discount of up to 30 per cent in such contracts.
Vietjet Air is also considering buying smaller aircraft for flights to small cities, according to Mr. Khanh. A decision on this matter may be made sometime this year. Vietjet Air now conducts 13 domestic routes and five international routes, and will soon open new international routes to China, Japan and Taiwan.
Mr. Khanh said that Vietjet Air transported 6 million passengers in 2014, nearly double the 2013 figure. By taking advantage of growth in the air transport market it has developed rapidly since starting in 2011. Its average seat occupancy is nearly 90 per cent.
A number of air transport companies in Southeast Asia have conducted IPOs recently. Bangkok Airways raised $402 million in its IPO last October, while Vietnam Airlines sold 3.48 per cent of its shares and raised nearly $52 million. Others, such as Indonesia Air Asia and Lion Air, are also considering IPOs.
Asia continues to be a strong market for the aviation industry. Passenger numbers have increased by two-thirds in the last five years, to over 1 billion. To serve demand in the growing market, Asian air transport companies have become major customers of aircraft manufacturers like Airbus and Boeing.