Vietnam Airlines divests stake in Cambodia Angkor Air

This information was revealed in post-audit notes to Vietnam Airlines’ audited 2019 consolidated financial statement released Friday, which explains how the company has been impacted by the Covid-19 epidemic this year.

Earlier in 2020, the Prime Minister had approved a plan allowing Vietnam Airlines to restructure its investment in Cambodia Angkor Air, and the company is accordingly carrying out this divestment, the report said.

Vietnam Airlines owns 49 percent of Cambodia Angkor Air, Cambodia’s flag carrier, and the remaining 51 percent belongs to the Cambodian government.

Vietnam Airlines has also signed contracts to sell five A321 aircraft with a total liquidation value of $37 million to undisclosed buyers. Delivery of all the above aircraft is expected to be completed before June this year, the airline said.

The Covid-19 pandemic, which has impacted economies worldwide, has directly hit Vietnam Airlines’ core revenue stream, partly a result of the Vietnamese government curbing air travel as well as imposing nationwide social distancing that severely limits travel, the carrier said.

"As a result, the ability of Vietnam Airlines to continue operating will depend on financial support from the Government and the extension of loans and payables from commercial banks, credit institutions and suppliers," the airline said in its post-audit notes.

A report by the Commission for Management of State Capital at Enterprises (CMSC) released last week said that Vietnam Airlines, which operates just a few domestic flights a week now, has suffered the greatest damage among the 19 state-owned corporations managed by the CMSC.

Only six of its 106-jet fleet are now operational, and half of its employees have had to stop working.

To ensure solvency by the end of this year, the report estimates that Vietnam Airlines will require VND3.52 trillion ($150.94 million) in short-term loans as well as VND12 trillion ($514.58 million) in state support, which needs to start disbursement this month.  

Revenues of the national flag carrier in the first quarter fell 26 percent year-on-year to VND19.2 trillion ($819 million). If the pandemic persists until the fourth quarter, the airline estimates a loss of VND19.6 trillion ($836 million) this year after years of making profit, the CMSC report said.

Last year, Vietnam Airlines made VND99 trillion ($4.25 billion) in revenue, up 1.4 percent year-on-year, and VND2.53 trillion ($109.05 million) in post-tax profits, down 2.3 percent year-on-year, according to its audited financial statement.