Photo: T.L
Five board members of Bamboo Airways JSC have resigned recently. The move hints a huge restructuring of the Vietnamese private carrier. It had a new chairman and general director. The airline expects a breakthrough from a new leader from Japan Airlines.
The big change came at a time when the fledgling airline is struggling to survive. In 2022, Bamboo Airways recorded a loss of up to VND17,600 billion.
Its asset size by the end of 2022 decreased by 33% compared to the beginning of the year, a decrease of VND8,849.9 billion to VND18,007.6 billion. In contrast, total debt increased by 121.6% compared to the beginning of the year, equivalent to an increase of VND 5,829.9 billion to VND 10,623.4 billion.
Since April 2022, the new investor has actively supported the restructuring of Bamboo Airways and especially supported the cash flow for the airline. through loan contracts up to VND7,500 billion.
According to Nguyen Minh Hai, the new General Director of Bamboo Airways, the airline is in the process of completing the ownership transformation from the old investor to the new one, the organizational restructuring will need to be completed.
Bamboo Airways’ 2022 losses surpassed charter capital, casting questions on its ability to maintain operational cash flow. The loss also came from the company’s provision for short-term/long-term doubtful receivables. The airline is under restructuring, clearing up poor assets.
In 2023, Bamboo Airways plans a double-digit growth, at about 15-20%. After separating from FLC, new investors aim to conquer big goals in a new development phase.
Bamboo Airways will seek the government’s approval to increase its fleet to over 30 airplanes and invest in fleet expansion to satisfy commercial demands. Passenger and freight transport income is predicted to expand by 15-20% as the international market recovers.
This plan reflects is considered positive at a time when the aviation market is showing many positive signs after a long period of paralysis due to the epidemic.
The Civil Aviation Administration of Vietnam estimates 34.7 million passengers in the first half of 2023, rising 49.6% from 2022. After China included Vietnam in a pilot list of countries where Chinese residents can travel in groups from March 15, international visitor numbers improved. In Q1 2023, Vietjet Air and Vietnam Airlines increased earnings.
In this context, Bamboo Airways can set bright expectations for its passenger transportation business. Before his resignation, Mr. Nguyen Ngoc Trong, former Chairman of Bamboo Airways’ Board of Directors, also informed: “The airline was close to reaching break-even point in the first quarter when the fleet was operating at full capacity. Bamboo Airways will be off the ground from 2024 and profitable from 2025.”
Looking back, Bamboo Airways’ pre-pandemic net profit came from aircraft sales and leaseback. With interest rates in key financial markets rising owing to inflation, global airplane leasing companies warn that they would pass on the cost to clients. airlines.
This means that the cost of leasing the aircraft will be higher. Meanwhile, despite the positive improvement in revenue, Bamboo Airways has not been able to get rid of the business situation below cost. In addition to the financial expenses, the company’s expenses increased many times over. If these activities are not improved, Bamboo Airways’ growth prospects are still question marks.
