Bamboo Air’s new CEO seeks investors as network and fleet shrink
Vietnam’s Bamboo Airways JSC is rebuilding under its new CEO, who is intent on proving the indebted six-year-old carrier has a future after shedding two-thirds of its fleet and 80% of its network. “We need our passengers to believe in our future,” Luong Hoai Nam said. “We need to make our investors, shareholders and potential investors believe in our future. We definitely have to move fast.” The airline, which is working to whittle down 11t dong ($454m) in debt and is in talks with a local bank on financing, posted a 17.6t dong loss last year, largely due to provisions for bad debts. It’s a far cry from the grand vision of former Chairman Trinh Van Quyet, who is now in prison. Quyet had plans for direct flights to the US and an initial public offering to give the airline a market capitalization of as much as $1b. Bamboo once operated 66 domestic routes and 15 international, but now it only flies a few international charters and 16 local routes, Nam said. “The impact of Covid left the airlines in Vietnam in a weaker financial situation,” said Brendan Sobie, Singapore-based founder of consultancy Sobie Aviation. “But the bigger picture is the Vietnam market experienced rapid growth on the back of extremely low fares. It’s not sustainable.” The Communist government in Vietnam, where the average annual salary is about $4,000, sets a cap on economy-class airfares. With flights dwindling and debt mounting, Bamboo ended contracts with its foreign pilots and will cut about 60% of its workforce costs by the end of March, Nam said in the interview Monday. The airline has reached an agreement to provide backpay to some foreign pilots who are still owed wages, he said. Bamboo has returned 19 aircraft, including three Boeing Co. 787s, to leasing companies, leaving it with a fleet of 11 planes made by Airbus SE and Embraer SA. To improve efficiency, the airline intends to eventually use only Airbus aircraft and aims to get back up to a 30-strong fleet in three to four years, said 60-year-old Nam, who joined Bamboo in October having previously led Vietnam Airlines JSC’s budget carrier Pacific Airlines. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-11-29/unaligned/bamboo-air2019s-new-ceo-seeks-investors-as-network-and-fleet-shrink
https://portal.staralliance.com/cms/logo.png
Bamboo Air’s new CEO seeks investors as network and fleet shrink
Vietnam’s Bamboo Airways JSC is rebuilding under its new CEO, who is intent on proving the indebted six-year-old carrier has a future after shedding two-thirds of its fleet and 80% of its network. “We need our passengers to believe in our future,” Luong Hoai Nam said. “We need to make our investors, shareholders and potential investors believe in our future. We definitely have to move fast.” The airline, which is working to whittle down 11t dong ($454m) in debt and is in talks with a local bank on financing, posted a 17.6t dong loss last year, largely due to provisions for bad debts. It’s a far cry from the grand vision of former Chairman Trinh Van Quyet, who is now in prison. Quyet had plans for direct flights to the US and an initial public offering to give the airline a market capitalization of as much as $1b. Bamboo once operated 66 domestic routes and 15 international, but now it only flies a few international charters and 16 local routes, Nam said. “The impact of Covid left the airlines in Vietnam in a weaker financial situation,” said Brendan Sobie, Singapore-based founder of consultancy Sobie Aviation. “But the bigger picture is the Vietnam market experienced rapid growth on the back of extremely low fares. It’s not sustainable.” The Communist government in Vietnam, where the average annual salary is about $4,000, sets a cap on economy-class airfares. With flights dwindling and debt mounting, Bamboo ended contracts with its foreign pilots and will cut about 60% of its workforce costs by the end of March, Nam said in the interview Monday. The airline has reached an agreement to provide backpay to some foreign pilots who are still owed wages, he said. Bamboo has returned 19 aircraft, including three Boeing Co. 787s, to leasing companies, leaving it with a fleet of 11 planes made by Airbus SE and Embraer SA. To improve efficiency, the airline intends to eventually use only Airbus aircraft and aims to get back up to a 30-strong fleet in three to four years, said 60-year-old Nam, who joined Bamboo in October having previously led Vietnam Airlines JSC’s budget carrier Pacific Airlines. <br/>
