Vietravel and Vietravel Airlines Part Ways

According to the plan, Vietravel is expected to complete its withdrawal from Vietravel Airlines before December 31 this year. The divestment assets include over 18.4 million common shares, equivalent to more than 14% of the airline’s charter capital. The transaction value is determined to be under 10% of Vietravel’s total assets, based on the audited third-quarter 2024 financial report.

Vietravel Airlines was approved by the government for establishment in April 2020 with a charter capital of 700 billion VND, aiming to become Vietnam’s tourism airline. Initially, Vietravel held 100% of its capital.

The airline operated its first commercial flight in January 2021 but soon faced a severe shock due to the COVID-19 pandemic. The market freeze led to near-paralysis, pushing the company into an exceptionally challenging period. Former Vietravel Airlines CEO Vũ Đức Biên once described it as “a bird after COVID-19, left without a single feather.”

Financial challenges quickly became a significant burden. In 2022, Vietravel Airlines reported a loss of 559 billion VND, with shareholders’ equity eroding by over 300 billion VND. Combined with the 860 billion VND loss in 2021, the airline’s total accumulated losses reached 1,000 billion VND in just two years of operation. Amid tightening cash flow, then-Chairman Nguyễn Quốc Kỳ proposed increasing total investment to 8,250 billion VND, including 2,000 billion VND from investors. However, this plan was halted due to legal constraints.

By 2023, losses expanded to nearly 1,500 billion VND, causing shareholders’ equity to turn negative by over 103 billion VND. Simultaneously, Vietravel Airlines faced 1,186 billion VND in debt to partners, customers, and financial institutions.

However, 2024 marked a rare positive shift as the airline reported its first profit in Q1, with a net profit of approximately 10 billion VND. In November, it was approved to increase its charter capital to 1,300 billion VND. The entry of Đỗ Quang Hiển (Chairman of T&T Group) as a strategic shareholder on December 12, 2024, was seen as a “new lifeline” for Vietravel Airlines.

Just months later, Đỗ Vinh Quang, son of Đỗ Quang Hiển, was elected Chairman of the Board. Under the new leadership, the airline increased its charter capital to 2,600 billion VND, acquired additional aircraft, and expanded its route network.

Vietravel’s withdrawal opens a new development path for Vietravel Airlines. The new shareholder structure includes T&T Airlines, T&T SuperPort, BVIM Fund, and individual investors. The airline will rebrand to operate independently from the Vietravel ecosystem, ensuring transparency and establishing its unique identity in the market.

Vietravel Chairman Nguyễn Quốc Kỳ stated that the divestment is a strategic move in portfolio restructuring, allowing the company to focus on core areas: tourism, services, and trade.