Vietravel raises $30 mln for new airline

The leading Vietnamese tour company said in a recent statement that its two-year bonds have been acquired by a local firm or firms, but gave no names.

The bonds have a coupon rate of 9.25 percent a year in the first 15 months and 11 percent for the remaining nine months.

The company had said earlier that the money will be used to fund its wholly-owned subsidiary Vietravel Airlines. It submitted a license application for the airline in April.

Vietravel Airlines plans to launch its first flight next year using either the narrow-body Airbus A321neo or Boeing 737.

Vietravel already organizes charter flights with partners. In the last two years it has been operating around 300 flights a year, both domestic and international.

In Vietnam, a company needs to have a charter capital of at least VND700 billion ($30 million) if it operates 10 aircraft, VND1 trillion ($43 million) in case of 11-30 aircraft and VND1.3 trillion ($56 million) for over 30 aircraft.

Vietnam’s aviation market now has six domestic carriers: Vietnam Airlines, Vietjet, Jetstar Pacific, Vietnam Air Services Company (VASCO), Bamboo Airways, and newly-licensed Vietstar Airlines, a military-run company, the last two making their debut this year.

Vietravel Airlines, along with KiteAir – a unit of hospitality firm Thien Minh Group, and Vinpearl Air – a unit of conglomerate Vingroup, are vying to be the seventh airline.

Last year, Vietnam’s 21 state-run airports served 103.5 million passengers, up 11 percent year-on-year, and the figure is set to rise to 112 million this year, according to the Airports Corporation of Vietnam.

Vietravel Friday listed 12.6 million shares on the Unlisted Public Companies Market (UPCoM) at the starting price of VND40,000 ($1.7) per share for a market cap of VND504 billion ($21.7 million).