Vietnam Airlines to get bailout funds after pandemic impacts

A parliamentary resolution passed Tuesday allows the State Bank of Vietnam to refinance and offer loan extensions no more than two times to banks that would lend Vietnam Airlines additional capital for the company to continue its operations.

The carrier will also be allowed to sell more shares to existing shareholders to increase its charter capital in accordance with the Law on Securities, but is exempt from the condition that its business being profitable in the year prior to the offering.

The State Capital Investment Corporation (SCIC), a state-owned holding company, will act on behalf of the government to purchase Vietnam Airlines shares.

The NA has asked for strict inspection and auditing of the measures when they are carried out. It has also asked Vietnam Airlines to continue building its own solutions for reducing losses and taking care of its employees in the context of the pandemic continuing to develop in complicated ways.

Vietnam Airlines has sent 14 reports to relevant state agencies and met with government representatives several times, seeking assistance in tackling financial problems posed by the pandemic.

The carrier has suggested the government grants it a relief package of VND12 trillion ($518.53 million), including options for refinancing and raising its charter capital.

It reported a loss of VND10.75 trillion ($464 million) for January-September, during which its revenues fell 58.3 percent year on year to VND23.9 trillion.

It transported 10.2 million passengers during the nine months, down 41.2 percent year-on-year.

The airline has blamed its plight on the pandemic's impacts. It has cut sales, financial and management expenses, reduced salaries of pilots and flight attendants. It has also increased operations of repatriation flights.

The carrier's third quarter revenues fell 68 percent year-on-year after the second Covid-19 outbreak hit the country late July. The third quarter is usually the highest revenue earner of the year as schools close and summer travel peaks. The second outbreak forced the carrier to cancel 22 new domestic routes during the peak period.

Vietnam Airlines currently operates more than 60 domestic routes with an average of 300 flights per day. It has resumed one-way flights to Japan and plans to reopen routes soon to mainland China, Taiwan, Laos and Cambodia.

The airline has estimated this year’s total loss at around VND15.2 trillion on revenues of VND55.7 trillion.