Bamboo Airways looks to have stocks listed in fourth quarter of 2020
Bamboo Airways looks to have stocks listed in fourth quarter of 2020
Bamboo Airways is planning its initial public offering (IPO) on the local stock exchange as the airline has been stuck in debts.
Bamboo Airways will stick to its expansion plan despite the difficulties from COVID-19
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Newswire Bloomberg stated that local real estate group FLC’s airline Bamboo Airways is preparing to purchase 60 engines and related services worth $2 billion of US-based General Electric (GE), aiming to upgrade its Boeing 787-9 Dreamliner planes.
The airline also intends to be listed on the local securities market in the fourth quarter after numerous postponements partially due to COVID-19.
The airline also revealed that it would rent more planes instead of purchasing them for its expansion. Currently, it operates about 45-50 local flights a day and expects to raise this to 100 in early June, reaching 80 per cent of its capacity before the pandemic.
COVID-19 has forced the airline to reduce the number of its flights, leading to a loss of more than VND1.5 trillion ($65.2 million) in this year’s first quarter. Nevertheless, Trinh Van Quyet, chairman of Bamboo Airways still set the target of raising the number of local routes to 60 by the end of 2020 and raising the number of international routes from six to 25. The US-Vietnam route will be opened at the end of 2021 or early 2022.
Bamboo Airways’ plan for expansion despite the difficulties besetting it in recent months has caused a stir in the local market.
Airport Corporation of Vietnam (ACV) on March 19 filed a document to the Ministry of Transport and the Civil Aviation Authority of Vietnam (CAAV), requesting help to recover the debts of VND205 billion ($8.9 million) from Bamboo Airways.
According to the document, ACV claimed that the airline frequently misses payment dates and there are concerns regarding the money-back guarantee stipulated in the contract between the two sides. Since last May, ACV has sent 24 documents requiring the airline to clear its overdue debts of VND178.7 billion ($7.77 million) to no avail.
Facing the complaint of ACV, Bamboo Airways admitted that there have been some difficulties in service payment. Specifically, the airline claimed ACV has set service fees at the highest possible level for all airlines.
“Bamboo Airways has been making alterations to its business plans and kept negotiating with ACV in good faith to reach an agreement that would be mutually beneficial and help all of us overcome the challenge,” said the representative of Bamboo Airways.
Similarly, another lender VATM said that Bamboo Airways has delayed paying the collected earnings for flight services since last June. Currently, the airline has debt arrears of VND38.6 billion ($1.68 million) and other payables since last December and this year's first two months. VATM has many times required the airline to clear its arrears within March 2020.
The MoT assigned the CAAV to handle the problems of Bamboo Airways.
