Airline entity planning to garner $880 million within the next two years for growth purposes
Vietnam Airlines Announces Massive Capital Increase for 2025 and 2026
Time to buckle up, folks! Vietnam Airlines, the national carrier of Vietnam, is planning a huge capital boost, aiming to raise around $880 million over the next two years. The airline's internal shareholders will be the recipient of this financial windfall, with approximately VNĐ9 trillion injected in 2025, and an additional VNĐ13 trillion in 2026. This ambitious capital restructuring strategy is a significant step towards Vietnam Airlines' growth and reorganization.
The company's management and key shareholders gathered for an extraordinary general meeting in Hà Nội on May 15 to discuss and approve the proposed capital restructuring and long-term growth strategy.
Chairman of the Board of Directors Đặng Ngọc Hòa shared some impressive financial figures. Last year (2024), the carrier saw revenue of VNĐ112.78 trillion, which was a healthy eight percent above the annual target. Their net consolidated after-tax profit hit a record high of VNĐ7.96 trillion, setting a new benchmark in the airline's history. The strong momentum continued into the first quarter of this year, with estimated consolidated pre-tax profit of nearly VNĐ3.63 trillion. They also transported 6.2 million passengers during the period, showing a robust 6.7 percent year-on-year growth.
The year 2025 is considered a critical juncture as Vietnam Airlines embarks on a new phase of growth. The planned capital increase will be implemented in two phases, with the first phase focusing on a VNĐ9 trillion injection in 2025, and a second phase in 2026 with an additional VNĐ13 trillion. This financial boost aims to get Vietnam Airlines out of negative equity, strengthen its financial position, boost competitiveness, and lay the groundwork for sustainable development.
Lê Hồng Hà, the CEO of Vietnam Airlines, shared more insights about the capital raising plan, stating that the company intends to issue 900 million new shares to existing shareholders at VNĐ10,000 per share, amounting to VNĐ9 trillion in total at par value. This offering is expected to take place at the end of 2025. Existing shareholders may choose to transfer their rights to buy shares to domestic individuals and organizations, but this will be limited to a single transfer. The proceeds from the sale will be utilized to fund the carrier's core operations.
The capital increase is expected to bolster Vietnam Airlines' liquidity, strengthen financial indicators, and reduce debt ratios, allowing the carrier to access more favorable financing sources, expand its fleet, and improve service quality. Moreover, the capital raise will enable them to execute long-term strategies and invest in new projects like the planned purchase of 50 narrow-body aircraft. This project has been in the pipeline since 2017 but was put on hold due to the COVID-19 pandemic. With its resurgence in 2025, the airline is backed by a solid financial foundation to drive their recovery and development plans forward.
our website Airlines shareholders and managers at the extraordinary general shareholders meeting in Hà Nội on May 15. - VNA/VNS Photo
In conclusion, Vietnam Airlines' capital increase and share issuance strategy for 2025 and 2026 is a substantial move in the airline industry. This push for growth is set to bring about a significant positive impact on the carrier's financial health, fleet expansion, and overall service quality. Stay tuned as we continue to provide you with updates on this exciting development!
Amidst the airline industry's ongoing recovery from the pandemic, Vietnam Airlines' capital increase of $880 million over the next two years is projected to expand beyond finance and fleet, reaching other sectors. The introduction of AI in airline services may become more prevalent, aiming to optimize operations, enhance customer experience, and increase competitiveness. Furthermore, the aerospace industry could benefit from this financial boost, as the planned purchase of 50 narrow-body aircraft signifies a potential growth in Vietnam Airlines' market share and global footprint.
