Privately-run VietJet Aviation Joint Stock Company (VJC
), which operates the sole operational no-frills carrier in Vietnam, on Thursday received approval from shareholders to increase the foreign ownership limit (FOL) as it is thirsty for funding to expand its network.
The firm’s shareholders agreed to loosen the FOL to 49% from the present 30%, the upper limit permitted by the law for a domestic airline. The relaxation is subject to government approval.
VietJet has 136 foreign investors who own 26% of the company, Chief Executive Officer Nguyen Thi Phuong Thao told Bloomberg. The largest overseas stakeholders are Singaporean sovereign wealth fund GIC and Dragon Capital
Raising the foreign investor limit is not aimed at attracting a strategic investor, though the company is open to one, she said. “I just want to create more investment opportunities to those who want to invest in VietJet and create better liquidity in the market,” she said.
VietJet commands a 42% share of the domestic aviation market, the same as Vietnam Airlines
, said Brendan Sobie, Singapore-based chief analyst at CAPA Centre for Aviation. The rest of the market is controlled by Vietnam Airlines’ subsidiaries.
VietJet, which is known for bikini-clad flight attendants to coastal destinations, aims to earn a pre-tax profit of 3.63 trillion dong ($160 million) on revenue of $1.8 billion this year. Last year, it booked a net profit of $110 million.
It aims to expand its fleet to 51 airplanes by the end of this year and fly 17 million passengers. Its network is poised to reach 78 routes, comprising of 41 domestic ones and 37 overseas ones.