Vietnam Air shares to start trading after ANA deal concludes

[HANOI] Vietnam Airlines Corp, which sold shares in an initial public offering 17 months ago, expects to get them listed "some time later this year" after closing a deal with ANA Holdings Inc, Chief Executive Officer Pham Ngoc Minh said.

The shares of the state-owned carrier may start trading on the Ho Chi Minh City Stock Exchange, Mr Minh said in an interview in Hanoi. The company agreed to sell an 8.8 per cent stake to the Japanese airline in January for US$108 million as part of a plan to offload 20 per cent.

"We expect to list the shares later this year after completing our strategic partnership deal with ANA and fulfilling some procedural requirements of the exchange," he said.

Vietnam Airlines is revamping its fleet with the latest wide-body aircraft from Boeing Co and Airbus Group SE as it adds international routes to meet demand for air travel from the country's growing middle class.

Pre-tax profit in the first half of 2016 is likely to jump about three to four times amid an increase in passenger traffic of as much as 13 per cent, Mr Minh said.

The company plans to open new routes from the Southeast Asian nation's central-coast beach cities of Nha Trang and Danang to Japan and South Korea, he said. Easing of tourist visa rules last year by the government for visitors from France, Italy, Spain, the UK and Germany is boosting traffic, according to Mr Minh.

Vietnam Air, which faces growing competition from low-cost carrier VietJet Aviation Joint Stock Co, is positioning itself as a premium airline, targeting the country's new flying classes as well as foreign tourists, he said.

"The overall market share doesn't mean so much," Mr Minh said. "Good margin is more important. We want to keep our main market segment as premium. We aim for high-end services."

The carrier said its first-quarter pre-tax profit rose 33 per cent , while passenger traffic climbed 12 per cent.

Vietnam Airlines raised about US$51.3 million from the November 2014 IPO, selling the entire 49 million shares offered at an average price of 22,307 dong (S$1.35). Equivalent to a 3.5 per cent stake, the company was then valued at US$1.5 billion.

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