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January 16, 2008

VIETNAM/AVIATION
Vietnam Airlines may go public this year

National flag carrier Vietnam Airlines is likely to make its initial public offering (IPO) this year, an official from the state-run carrier told Xinhua on Tuesday.

"We have been slated for equitization in 2008. The government has just permitted us to select a foreign consultant for the equitization process, including defining the value of Vietnam Airlines. The government has also allowed us to issue more shares to raise charter capital," the official said on condition of anonymity, noting that the state will hold 70-80 percent of the new charter capital of the future equitized state corporation.

"When making IPO, expected this year as schedule or next year at the latest as I think, Vietnam Airlines will sell 20-30 percent of stakes to outsiders, including 10-20 percent of stakes to foreign investors," depending on its equitization plan to be submitted to the government for approval in the near future, the official said.

Vietnam Airlines has charter capital of 5,738 billion Vietnamese dong (VND) (358.6 million U.S. dollars). "However, its value will be defined higher or lower. I hope that it would be higher because we have performed well in recent years," the official said.

Vietnam Airlines transported over 8 million domestic and foreign passengers, and made total revenues of roughly 20,374 billion VND (1.3 billion U.S dollars) last year. Its pre-tax profits stood at 370 billion VND (23.1 million dollars), and its seat occupancy rate was 75.7 percent in 2007, up 6.4 percent and 4.5 percentage points, respectively, against 2006.

"Vietnam Airlines plans to serve over 9 million passengers this year. Now, our fleet includes 47 aircraft, including 25 Airbus planes. We plan to increase our fleet to 86 by 2015 and 110 by 2020," said the official.

Now, Vietnam has three operational domestic carriers, including Vietnam Airlines, joint-stock Pacific Airlines, and Vietnam Air Services Company, an affiliate of Vietnam Airlines.

Vietjet Air, the country's first private airline with a chartered capital of 600 billion VND (37.5 million dollars), plans to launch its first commercial flight in December 2008 or early 2009.

Courtesy Xinhua

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