Vietnam Airlines launched a restructuring plan designed to improve the airline’s competitiveness and efficiency through increasing sales while reducing expenses, reorganising the company’s structure and improving its fleet efficiency. As reported by local media sources including Asia News Network and Vietnam Business News, the airline intends to hold an IPO by the end of 2013, with at least USD200 million expected to be raised. 70% to 80% of the airline’s shares continue to be held by the Vietnamese Government. In 2015 and 2017, Vietnam Airlines expects to issue additional shares of a total value of USD450 million in order to raise capital to purchase nine A350 and four Boeing 787-9 aircraft. Once the restructuring is completed, the airline will reduce its subsidiaries from 18 to 15 while affiliate companies will reduce from 14 to 12.
Vietnam Airlines launches restructuring plan; IPO in late 2013
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Global commercial aircraft deliveries fell in 2016 as Boeing again outsold Airbus; 2017 to be a peak
The global commercial aircraft fleet grew by 4% in 2016 and the year ended with an order backlog of more than nine years of production. Among the regions, North America still has the biggest and oldest fleet, but the lowest ratio of orders to aircraft in service. By contrast, Middle East has the fewest in service, but the highest ratio of orders to current fleet numbers.
This report gives an overview of the number of commercial aircraft deliveries in 2016 and the outlook into 2017 and beyond. It also looks at numbers in service and on order by region. It is based on preliminary numbers from the CAPA Fleet Database and guidance on 2016 deliveries from Airbus and Boeing, who have yet to announce final numbers.
The data indicate that total worldwide deliveries fell in 2016, the first such decline for six years, as a result of delays to new aircraft programmes. Boeing delivered more aircraft than Airbus for the fifth straight year, but its deliveries fell short of its 2015 level, while Airbus increased its numbers year-on-year. Total deliveries will likely rise again in 2017, but this may prove to be a peak year.
Vietnam Airlines 2017 outlook: slower growth and smaller profits as competition intensifies
Vietnam Airlines has grown rapidly and profitably over the last two years, despite intensifying from its fast-growing local rival VietJet Air. Vietnam Airlines is now only one of four airlines in Southeast Asia with more than 20 million annual passengers.
Passenger traffic has grown by more than 50% since VietJet’s launch at the end of 2011, while the flag carrier has accumulated approximately USD150 million in pre-tax profits. In 2016 Vietnam Airlines achieved 19% growth and record profitability.
However Vietnam Airlines plans to grow at a much slower rate in 2017, and intensifying competition will likely impact profitability. Opportunities for further domestic expansion are becoming more limited as the market becomes more saturated, while international expansion poses more challenges and risks.