Vietnam Airlines overdue debts surpass $578 mln

The national flag carrier’s management board has approved a plan on issuing 800 million shares with a price of VND10,000 each to existing shareholders. After getting approval from State Securities Commission, the carrier would issue the shares this year.

After the share issuance, Vietnam Airlines will raise VND8 trillion to pay due debts of VND2.05 trillion to credit institutions, and due and overdue debts of VND3.95 trillion to its partners and suppliers, increase working capital to maintain production and business amid the Covid-19 outbreak, and repay bank loans totaling VND2 trillion due in 2022.

As of June 30, Vietnam Airlines’s due debts to seven credit institutions had hit VND2.053 trillion, including VND1.128 trillion at Vietcombank. Meanwhile, overdue debts to partners and suppliers have amounted to VND13.337 trillion, including nearly VND7.1 trillion for plane rentals, over VND4 trillion worth for fuel, engine and part maintenance and repair, and nearly VND1.85 trillion for flight and aviation services.

Vietnam Airlines plans to negotiate with partners about price decline and debt delay, and lower costs by VND6.8 trillion mainly through axing advertisement and trade promotion expenses, and adjusting passenger servicing criteria.

In the first half of this year, Vietnam Airlines racked up losses of some VND9.823 trillion. It has estimated consolidated losses of VND14.526 trillion this year, up nearly 30 percent against last year, and consolidated revenues of nearly VND37.4 trillion, down 11.6 percent.

The carrier’s plan on consolidated losses and revenues is based on assumptions that it finishes the sale of 11 Airbus A321 planes, and that the government allows fully vaccinated entrants to visit Phu Quoc Island in the southern province of Kien Giang, and completes the disbursement of an aid package worth VND12 trillion.