Proposed changes to the business model at Vietravel Airlines.

Báo Đầu tư•10/11/2024

In addition to nearly doubling its charter capital, Vietravel Airlines has also changed its operating model from a limited liability company to a joint-stock company.

Vietravel Airlines will change its operating model to a joint-stock company.

With no foreign shareholders yet, the Vietnam Civil Aviation Authority has just completed the assessment of the application for the renewal of the Air Transport Business License for Vietravel Airlines, after receiving the application through the electronic administrative procedure processing system. In Official Letter No. 5775/CHK-VTHK recently sent to the Ministry of Transport, the state management agency for aviation stated that Vietravel Airlines' proposed changes to its Air Transport Business License No. 02/2020/GPKDVCHK, issued on October 29, 2020, are appropriate and comply with the regulations of Decree No. 92/2016/ND-CP dated July 1, 2016, on conditional business sectors in the field of civil aviation (Decree No. 92) and Decree No. 89/2019/ND-CP dated November 15, 2019, amending and supplementing some articles of Decree No. 92 and Decree No. 30/2013/ND-CP dated April 8, 2013, on air transport business and general aviation activities (Decree No. 89). "Based on the Civil Aviation Law 2006, the Law amending and supplementing a number of articles of the Civil Aviation Law 2014, Decree No. 92, Decree No. 89 and the application dossier of Vietravel Airlines, we recommend that the Ministry of Transport consider re-issuing the Air Transport Business License to Vietravel Airlines, taking into account the changes proposed by this tourist airline," Official Letter No. 5775 clearly states.

- Vietravel Group Joint Stock Company has major shareholders including: 3 Vietnamese individuals (Mr. Nguyen Quoc Ky holding 38.14%, Mr. Tran Doan The Duy holding 14.19%, Mr. Vo Quang Lien Kha holding 14.18%) and 1 Vietnamese enterprise (Saigon International Travel and Tourism Services Co., Ltd. holding 15.17%). - Vietnam Transport and Tourism Marketing Joint Stock Company (Vietravel) has major shareholders including: 1 individual (Mr. Nguyen Quoc Ky holding 10.96%) and 3 Vietnamese enterprises (Vietravel Group Joint Stock Company holding 14.29%, Hung Thinh Group Joint Stock Company holding 20.52%, VinaCapital Fund Management Joint Stock Company holding 9.77%).

Reportedly, the proposed changes to License No. 02 by Vietravel Airlines include: the name and type of business; charter capital and shareholders; the addition of one legal representative; and the location of the head office, branches, and representative offices. Specifically, Vietravel Airlines will increase its charter capital from VND 700 billion to VND 1,300 billion to ensure sufficient capital for its production and business operations. The Civil Aviation Authority of Vietnam stated that this has been recorded in Vietravel Airlines' business registration certificate. In addition, the conversion of the business type from a limited liability company to a joint-stock company, with the participation of new shareholders and a change in capital contribution, results in a total capital scale of VND 1,300 billion for Vietravel. Vietravel Airlines stated that the company does not have any capital contributions from foreign investors. All four shareholders (two companies and two individuals) contributing capital are businesses and individuals with registered business licenses/Vietnamese citizenship. For the two contributing companies, which are legal entities operating as joint-stock companies, the shareholder structure of these two companies consists entirely of Vietnamese organizations/individuals as major shareholders; no foreign investors hold more than 49% of the capital. “Thus, the shareholder structure of Vietravel Airlines also ensures compliance with the regulations in Article 8, Decree No. 92, amending and supplementing Clause 5, Article 1, Decree No. 89, regarding capital requirements in air transport business,” the Civil Aviation Authority of Vietnam stated. Opening the opportunity to become a public company. Another significant change, related to the Air Transport Business License for Vietravel Airlines, is the name and type of business. Accordingly, Vietravel Airlines has transformed its business model from a limited liability company to a joint-stock company to mobilize social resources for the company's development, while also aligning with the model of its parent company, which has been transformed into Vietravel Corporation. This is recorded in the Certificate of Business Registration for a joint-stock company of Vietravel Airlines, issued by the Thua Thien Hue Department of Planning and Investment in mid-September 2024. It is known that upon transitioning to a joint-stock company (with an increase in capital to VND 1,300 billion), Vietravel Airlines submitted an application to the Ministry of Planning and Investment for consideration and reporting to the Prime Minister to allow the adjustment of the investor's name and investment capital for the Vietnam Travel Aviation Project. Specifically, the airline requested the adjustment of the investor information from "Vietnam Travel Aviation Limited Liability Company" to "Vietnam Travel Aviation Joint Stock Company". The investment project scale was adjusted from “3 aircraft in operation in the first year, gradually increasing to 8 aircraft of Airbus/Boeing or equivalent type by the fifth year” to “3 aircraft in operation in the first year, gradually increasing to 25 aircraft by 2025, 50 aircraft by 2030, and further development after 2030 as appropriate. Aircraft type is Airbus/Boeing or equivalent”. Based on Vietravel Airlines' application and the provisions of Clause 3, Article 41 of the Investment Law, in early July 2024, the Ministry of Planning and Investment issued Document No. 5343/KHĐT-GSTĐĐT notifying Vietravel Airlines about the adjustment of investor information and total investment capital for the project. Accordingly, the Ministry of Planning and Investment affirmed that the change in investor information and total investment capital does not alter the scale of the investment project (project scale: number of aircraft in operation up to 8 aircraft, Boeing and Airbus types), and therefore does not fall under the case requiring approval of investment policy adjustments. According to the Civil Aviation Authority of Vietnam, with the information stated in Document No. 5343/KHĐT-GSTĐĐT and the Business Registration Certificate of Vietravel Airlines issued by the Department of Planning and Investment of Thua Thien Hue province, the change of name and business type of Vietravel Airlines is in accordance with the law. Invested by Vietravel Group, Vietravel Airlines officially operated its first commercial flight connecting Ho Chi Minh City and Hanoi on January 25, 2021. Mr. Nguyen Quoc Ky, Chairman of the Board of Directors of Vietravel Airlines, assessed that the airline is an important piece, contributing to the completion of the multi-dimensional tourism ecosystem, combining multimodal transport that the Group aims for with the mission of connecting and promoting the development of famous tourist destinations in Vietnam and internationally, in order to bring customers unique air travel products, convenient experiences and exhilarating emotions on every flight. Currently, Vietravel Airlines operates 2 A321s and 1 A320 on some domestic regular routes and international charter flights. As of the end of October 2024, Vietravel Airlines transported 845,102 domestic passengers and 239,000 international passengers, ranking above Pacific Airlines and VASCO. "With changes related to the operating model and charter capital size, we can hope for an early boost in the operations of Vietravel Airlines - the youngest airline in the Vietnamese aviation market," a specialist commented. Source: https://baodautu.vn/de-xuat-thay-doi-mo-hinh-tai-vietravel-airlines-d229408.html