HA NOI — The Ministry of Transport has submitted a proposal to Prime Minister for approval to restructure national flag carrier Vietnam Airlines into a national group in the next eight years.
The restructuring project aimed to develop the corporation into a large carrier group including key businesses in sectors of aviation transport, aviation industry and other relating services in the Southeast Asia.
The ministry said Vietnam Airlines would have to implement four pillars in their restructuring programme including restructuring profession and business sectors, strategy and products, human resources and investment, finance and management to reach the target.
Under the restructuring project, the group would have four aviation service companies, 15 subsidiaries, 12 joint ventures compared to the current 18 subsidiaries and 14 joint ventures and six new established companies.
Accordingly, Vietnam Airlines aviation system would comprise the holding company, Vietnam Airlines, the Vietnam Airlines Engineering Company (VAECO), low budget Jetstar Pacific Airlines which it holds controlling share of around 70 per cent and joint venture, Cambodia Angko Air.
Vietnam Airlines expected that their business results would be significantly improved with turnover of US$43.5 billion, profit of $0.63 billion and pre-tax profit of $1.08 billion in the period of 2012-20 due to the restructure.
The carrier also proposed to the ministry to maintain its entire investment in VAECO and Vietnam Air Petrol Company (VINAPCO).
It planned to withdraw investments in inefficient non-core businesses including stock, banking, real estate and loss-making enterprises by 2015. It expected that the withdrawal would bring about VND530 billion ($25.2 million).
The Transport Ministry asked Vietnam Airlines to mobilise other capital sources for the restructure.
Vietnam Airlines before proposed to increase its charter capital by equitisation and revenue as well as issuing stocks to ensure corresponding capital to receive 13 aeroplanes in the 2016-18 period.
It also released a plan to choose international consultant firms for its equitisation process to conduct an initial public offering (IPO) by the end of 2013.
Vietnam Airlines has been the last State-owned economic groups and corporations which were established following PM Decision 91-TTg, known as corporations 91 managed by the Ministry to complete restructuring project submitted to the Government following Viet Nam National Shipping Lines (Vinalines) and Viet Nam Shipbuilding Industry Corporation (Vinashin). — VNS