“We will restart our equitisation part-privatisation process because we see the market has recovered,” Pham Ngoc Minh, the flag-carrier’s chief executive, told the Financial Times.

The airline, which wants to emulate the success of regional rivals Singapore Airlines and Thai Airways International, is “still looking for the best time to do an IPO” and will be watching the market reaction to the forthcoming share sale by Garuda, Indonesia’s state-owned carrier.

“We will see Garuda as a case study and we will learn from them,” he said.

Vietnam Airlines has not yet agreed with the government how big a stake to sell off but it has started looking for international IPO advisers, Mr Minh added.

In 2008, the government approved Vietnam Airlines’ plan to sell off 20-30 per cent of its equity via an IPO, including the sale of a 10-20 per cent stake to strategic foreign investors. But, as with other large state-owned enterprises, the plan was shelved after the global financial turmoil and a domestic inflation crisis led to a collapse on Vietnam’s embryonic stock market.

Although demand for air travel and Vietnam’s stock market have recovered since then, any IPO will face fresh challenges including renewed macro-economic instability and reduced risk appetite among investors following the recent foreign debt default by Vinashin, a state-owned shipbuilder.

Two large state-owned companies, oil and gas group PetroVietnam and coal miner Vinacomin, were unable to complete foreign bond issues last month, following sovereign debt downgrades from all the main credit rating agencies in 2010.

Mr Minh said his company was a “totally different case” and that Vietnam Airlines had been able to secure financing for aircraft purchases, even though the negotiations have taken longer and more banks have been required to back deals than previously.

He described Vietnam Airlines as a “showcase” for Vietnam’s fast-expanding economy and expressed his dissatisfaction with the fierce public and press criticism of state-owned companies that has accompanied the problems at Vinashin.

“They see the top management of state-owned companies as either non-professional people or politicians or, even worse, people who are corrupt,” he said. “I do not appreciate this sort of comment.”

Vietnam Airlines’ revenue rose 47 per cent to 36,300bn Vietnam dong ($1.86bn) last year and pre-tax profits doubled to 350bn Vietnam dong.

By Ben Bland - The Financial Times - January 16, 2011