Coffers close to empty, Vietnam Airlines seeks government credit

Tran Thanh Hien, the airline’s chief accountant, said at a Friday forum that the national flag carrier’s funds could be empty by August and it could fall into a "really bad" situation.

The airline expects to report a loss of VND15-16 trillion ($644-687 million) this year, Hien said.

A complete suspension of flights from late March to late April saw carrier’s fleet grounded, but it still had to pay several fees to park and maintain it. It also had to pay nearly VND4.4 trillion ($189 million) from mid-February to March-end in refunds to passengers for canceled flights.

The carrier’s accountant said it had done all it could to mitigate crisis impacts, like cutting staff salaries and asking many to go on unpaid leave, to reduce costs by VND4.5 trillion ($193 million).

The airline is now seeking to borrow VND4-12 trillion ($172-515 million) from the government. "We are not asking for an investment, we will pay back this sum," Hien said.

Vietnam Airlines also plans to issue more shares to existing shareholders to increase capital, but this could take 5-6 months.

The State Capital Investment Corporation, a state-owned company set up by the government to utilize state investment, has recently expressed interest in pouring trillions of dong (VND1 trillion = $42.9 million) into Vietnam Airlines to restructure the company.

Last year, the airline saw its post-tax profit fall 2.4 percent to VND2.54 trillion ($109 million).