Vietjet to expand through partners

HANOI, 3 October 2013: VietJet Air will inject capital into at least three joint ventures with three Asian airlines in 2014 to increase its competitiveness in regional markets.

The airline managing director Luu Duc Khanh confirmed the airline was ready to invest in airlines in the region next year citiing Thailand’s Kan Air, Myanmar Airlines and a yet unnamed Northeast Asian airline as the targets.

Last June, Chiang Mai-based Kan Air signed a Memorandum of Understanding with VietJet Aviation Joint Stock Co to establish a joint venture in Thailand.

To comply with Thailand’s company registration laws, Kan Air will retain the majority share of 51% with an investment value of US$7 million and VietJetAir will own 49% valued at US$6.5 million.

Kan Air president, Somphong Sooksanguan, told TTR Weekly recently that the new airline would operate both domestic and international routes. However it would need to shift its home base from Chiang Mai to Bangkok.

“The new airline will be based at Suvarnabhumi Airport offering flights to Chiang Mai, Phuket, Hat Yai and international services to China and points in the Mekong region mainly Myanmar and Laos as well as short-haul destinations,” he said.

The choice of airport base might be challenged by the Airports of Thailand, which is encouraging airlines to move to Don Mueang to relieve congestion at Suvarnabhumi airport. However, to build an international network, Suvarnabhumi is the airport of choice mainly to tap connecting airline traffic from the region.

Thai VietJetAir will lease two to three Airbus A320s, the same aircraft type that VietJetAir uses on domestic routes in Vietnam and for its services to Thailand.

The joint venture will offer more opportunities for travellers, especially those in Vietnam, to explore new destinations in Thailand, Singapore, Taiwan and South Korea.

VietJet Airlines also announced it will buy as many as 92 Airbus aircraft in the next eight years. The US$9 billion order was signed in Paris last Wednesday.

The plan will be funded from VJA’s own capital, plus bank loans, bonds, and funds that it expects to earn from an IPO (initial public offering). The largest loan will be from the European export credit policy, which assists aircraft buyers.

According to the plan, in the next eight years, the airline will need to buy at least 10 aircrafts annually.

越《年轻人报》10月1日报道,法国驻越南大使Jean—Noel Poirier称,若越南私营航空公司(VietJet Air)签约,在未来10年内自法国进口92架客机,越法贸易将趋向平衡。VietJet Air执行总监刘德庆表示,获得欧洲出口信贷融资担保是签订购机合同的必要条件。目前VietJet与泰国航空公司(Kan Air)联营合作,2014年将与缅甸和东北亚的航空公司合作。