Vietnam Airlines slashes business targets for 2015

Hanoi, March 3 (VNA) - National flag carrier Vietnam Airlines expects to reduce both revenue and profit targets in 2015, while increasing its investment plan by almost two-and-a-half times, compared with the previous year. This content is revealed in the corporation's documents, which were presented to shareholders before the first shareholders' meeting, slated to open on March 12 in Hanoi. According to the plan, Vietnam Airlines' consolidated revenue this year will likely reach 70.156 trillion VND7 (3.3 billion USD), 2.5 percent lower than the previous year's estimated results. The aviation company's pre-tax profit goal is also set at 613.5 billion VND (28.7 million USD), a drop of 5 percent from the previous year. The corporation attributed the lower targets to falling fuel prices, which have led to decreases in fuel surcharges on flight tickets. Further, parent Vietnam Airlines company plans total revenues of 55 trillion VND (2.6 billion USD) and a pre-tax profit of 179.8 billion VND (8.4 million USD). The airlines also expects to transport over 16.7 million passengers this year, an increase of 6.2 percent over 2014's figure, and the average rate of seats filled on commercial flights is expected to be 78.5 percent, accounting for 45.9 percent of the total market share. Vietnam Airlines plans to invest almost 23 trillion VND (1.07 billion USD) this year, with 92 percent of this being used to develop its fleet, as it acquires seven new aircraft, including three Airbus 321s and four Boeing 787s. It expects to increase the size of its fleet to 80 aircraft by the end of this year. At the same time, the aviation company will sell three ATR-72s and two Boeing B777-200ERs. While the ATR-72 aircraft were fully depreciated, Boeing B777-200ERs have been in operation for 10 years and can’t ensure the quality of their service in the face of the current fierce competition, the company said. Regarding the private issue to strategic shareholders, the airline proposes to sell over 282 million shares, about 20 percent of its capital, to no more than three investors. The selling price will be based upon the commitments pledged by strategic investors and in accordance with law and market conditions at the time of the sale. The shares are expected to be sold at the IPO price of 22,300 VND per share. Vietnam Airlines hopes to raise a total capital of 6.3 trillion VND (294.4 million USD) through the sale and the money will be invested in its fleet development plan. If this plan is successful, the company's charter capital will increase from the current 11.2 trillion VND (523.4 million USD) to more than 14 trillion VND (654.2 million USD). Vietnam Airlines will start to operate as a joint stock company on March 31, 2015. It also plans to establish two companies, including Noi Bai – Da Nang – Tan Son Nhat Airport Ground Services Co Ltd and Air Services Co Ltd.-VNA