VietJet borrows US$329 million to purchase airplanes to raise its fleet size to 40

By Minh An - Nov 01, 2017 | 06:42 AM GMT+7

TheLEADERVietJet is borrowing nearly VND7.5 trillion (equivalent to US$328.67 million) to pay a deposit on airplane purchase contracts, VietJet reported.

VietJet borrows US$329 million to purchase airplanes to raise its fleet size to 40
VietJet is the Vietnam's largest low-cost carrier. Photo:

The loan is in addition to equity of over VND4.5 trillion (roughly US$ 198.37 million)

The size of VietJet's loan has increased by about VND1 trillion (approximately US$44.08 million) since the beginning of this year. To maintain the loan, VietJet had to pay more than VND57 billion (equivalent to US$2.5 million) of interest in the first nine months of 2017.

VietJet’s lenders include HDBank, Vietinbank, Vietcombank, MB, HSBC, AnBinh Bank and Maritime Bank. Vietinbank offers a loan of VND3 trillion (roughly US$132.25 million), accounting for 40 per cent.

VietJet has made an order of 219 airplanes with Airbus and Boeing. By the end of September, 27 airplanes were handed over, raising its fleet size to 40 airplanes. VietJet’s fleet is expected to reach to 52 in this year.

With its operational model, VietJet does not intend to buy and own planes, instead, it will sell and lease after taking over the planes.

VietJet has established four subsidiaries in the British Virgin Islands, Singapore and Ireland since 2014 to perform this business, which has generated big profits for VietJet in 2016 (US$61.71 million) and in the first six months of this year (US$35.26 million).

In addition to aviation, the airplane business will continue to account for a large proportion of VietJet's profits.

Earlier, the airline reported a pretax profit of VND1,054 million (equivalent to US$46.46) in the third quarter of 2017, a 35 per cent year-on-year increase. VietJet’s accumulated pre-tax profit from the beginning of this year reached about VND3 trillion (approximately US$132.25 million), higher than that of Vietnam Airlines.