To fuel its aggressive expansion, Vietnam's Bamboo Airways is aiming to raise around $100 million in its planned initial public offering (IPO) next year. The Hanoi-based company aims to significantly increase its market shares in one of the world's fastest-growing aviation markets by taking advantage of the country's growing middle class.
Bamboo Airway's chairman, Trinh Van Quyet, mentioned in an interview that the IPO should help the firm take at least 30 percent of the domestic market by next year. The startup airline is currently estimated to control around 10 percent of the Vietnamese aviation market.
According to Quyet, several economic factors in Vietnam are working in conjunction with the company's plans. The executive noted that Vietnam's economic growth is continually allowing consumers to have more disposable income, which most of them will use to travel. Additionally, the country is also seeing a rapid increase in the number of middle-class earners.
Vietnam is also rapidly increasing its aircraft capacity, with airports now able to handle more passengers. According to the Civil Aviation Authority in Vietnam, airports around the country had a total passenger capacity of around 106 million last year. This was a 13 percent increase from the previous year.
As for its planned IPO, Bamboo Airways announced that it has yet to decide where it will be listing its shares. However, it did confirm that it will be listing its shares on its chosen bourse after its IPO next year.
The airline, which is owned by the FLC Group, was originally founded in 2017 with a charter capital of around $56.52 million. The carrier only officially started its operations in January of this year using a leased Airbus A320 with a route from Ho Chi Minh City to Hanoi.
Since the start of the year, the company has quickly grown. As of the moment, the startup airline had around 10 aircraft in active operations with 25 domestic and international routes. The airline has a standing memorandum of understanding with Airbus for it to purchase up to 24 Airbus A321neos.
In August of this year, Vietnam's Deputy Prime Minister Trinh Dinh Dung had signed a decision to allow the airline to expand its fleet. The decision allowed Bamboo Airways to expand its fleet by up to 30 aircraft by 2023. As part of its expansion plans, Bamboo Airways expects to be the first Vietnamese airline to have a direct route to the United States by late 2020.
