Pacific Airlines suspends operations after returning leased aircraft

By Anh Tu   March 18, 2024 | 08:17 pm PT
Pacific Airlines suspends operations after returning leased aircraft
An Airbus A320 of Pacific Airlines. Photo courtesy of the company
Pacific Airlines has returned all its leased airplanes due to financial difficulties, which has forced it to temporarily cease operations.

It had been unable to make lease payments in time.

On Monday a spokesperson said the airline is "restructuring its fleet and route network to increase operational efficiency."

The budget carrier will lease three aircraft from its parent company, Vietnam Airlines, just enough to meet the minimum requirement for an airline to keep its license.

It will also share certain infrastructure and resources such as check-in counters and ground service vehicles with Vietnam Airlines.

The spokesperson assured that the regular flight schedule would soon resume.

Meanwhile, customers who have bought tickets from the carrier will be notified of the new schedule or transferred to flights operated by Vietnam Airlines.

According to the executive of a domestic airline, it is currently difficult to lease planes due to the high global demand, which is driving prices up.

Furthermore, lessors reclaim aircraft immediately if lessees are late to pay, unlike during the Covid-19 pandemic, when they showed leniency.

Pacific Airlines' loss of its entire fleet is likely to make the aviation market more challenging in the coming months, especially during the peak summer season when airlines’ capacity may not be sufficient to meet demand.

Carriers, including Vietnam Airlines and VietJet Air, are facing a severe shortage of aircraft after having to temporarily ground over 30 A321s, the main aircraft used on domestic routes, for maintenance and engine repairs.

Bamboo Airways has also cut its fleet by more than half since last year as part of its restructuring.

Vietnamese airlines now have a total of 170 planes, down from 230 in 2023.

The shortage has been making tickets scarce and expensive, especially during the recent Tet (Lunar New Year) holidays from Feb. 7 to 15.

Pacific Airlines, established in 1991 as a low-cost air carrier, has faced numerous challenges in recent years.

It made profits of tens of billions of dong in 2018-19 but suffered heavily when the pandemic hit.

In 2022, the airline incurred a loss of nearly VND2.1 trillion (US$84.9 million).

Since Australian airline Qantas sold its stake in Pacific Airlines in 2022, Vietnam Airlines has owned 98.8% of the company.

It has since been seeking new investors for the budget airline and attracted plenty of attention.

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