Road gets even rougher for Covid hit transport firms

The taxi associations of Hanoi, Da Nang City and Ho Chi Minh City have requested emergency support from the government to deal with the impacts of the Covid-19 wave.

With the number of passengers go down 80-90 percent, companies’ revenues have plunged as have drivers’ incomes. Many taxi firms are reporting mounting bad debts and say they are on the verge of bankruptcy.

The associations want the government to provide a value-added tax break for six months, cut car registration fees by 50 percent, and provide loans with interest reduced by 3-5 percentage points from current levels.

Other transportation companies are facing similar difficulties after the latest Covid-19 wave began April 27. As the number of Covid-19 cases mount, many localities have imposed social distancing measures and called for residents to restrict travel.

The My Dinh Bus Terminal in Hanoi has seen the number of operating buses down 56 percent to 350 trips a day. A senior official of the Ly Truong Son Bus Terminal said that if the pandemic persists, both transport companies and stations will "hit the end of the road."

The Minh Thanh Phat company, which operates a route from Hanoi to the northern border province of Lao Cai, has suspended most of its 100 buses since the beginning of May due to a lack of passengers.

Each trip costs it around VND7.5 million ($325), while revenue is only around VND2 million.

"We have to keep the buses running to retain customers despite losses," CEO Do Vang Bang told local media, adding that the company is struggling to repay its debt of nearly VND1 billion.

Although transportation firms are eligible for government support, they have struggled to access credit from banks.

"Banks only give loans to businesses to pay staff salaries if we provide mortgage. But most of our vehicles have been used for a long time and therefore banks give them a low valuation because of depreciation," said Nguyen Cong Hung, chairman of the Hanoi Taxi Association.

Vietnam Railways has also suspended most of its train routes in May. In the first quarter, it suspended work for 550 staff because it was unable to pay their salaries.

Airlines have also cut down flights amid the rising number of Covid-19 cases.

Vietnam Airlines has seen the number of flights between April 19 and May 18 go down 16.5 percent from the previous 30 days, according to the Civil Aviation Authority of Vietnam.

Corresponding figures for Bamboo Airways and Vietjet Airways were 16.3 percent and 12.2 percent, respectively.