Vietravel Airlines, a start-up aiming to begin commercial flight operations in late 2020, could get a major cash boost as parent company Vietravel, Vietnam’s biggest tour operator, seeks to raise VND700 billion dong (USD30.15 million) from the sale of a non-convertible two-year bond to fund the project.

Vietravel, known formally as Vietnam Travel and Marketing Transports JSC, established Vietravel Airlines in February but has not yet obtained an airline business licence, an unnamed company source told Reuters on July 26.

Vietravel Airlines would initially operate three A320 or B737 family aircraft, local media reported, to be raised to a fleet of eight after five years.

“We have submitted the bond sale plan to the State Securities Commission for approval,” the source told Reuters. “The money raised would be for our Vietravel Airlines project.”

The bond would have an annual coupon rate of up to 11%, a draft plan shown to the news agency revealed.

Vu Duc Bien, Vietravel Airlines' general director, told Thua Thien Hue Provincial People's Committee on June 11 that Vietravel Airlines already had a total investment of about VND1,000 billion dong (USD43 million), Vietnam Securities Times reported.

Founded in 1995 and based in Ho Chi Minh City, Vietravel has representative offices in Australia, the United States, France, Singapore, Cambodia, and Thailand besides a network of domestic branches. It recently posted a first-quarter profit of VND5 billion dong (USD216,000), according to the Dan Viet newspaper, which also speculated that this did not seem enough to sustain the operation of an airline.