Vietnam Airlines reports heavy losses, denies rumors of bankruptcy

Despite incurring heavy losses of VND10.75 trillion (US$463.3 million) in the January-September period, Vietnam Airlines has refuted rumors that it has filed for bankruptcy due to Covid-19.

According to a report by the national flag carrier, its consolidated revenue in the nine-month period was estimated at VND23.9 trillion, equivalent to 41.7% of that earned in the same period last year. Of the total losses, the parent company suffered losses of more than VND8.7 trillion.

Tran Thanh Hien, head of Vietnam Airlines’ Finance and Accounting Department, told the local media on October 13 that the airline must ensure capital for its operations.

In the middle of this year, Vietnam Airlines asked the Government to provide VND12 trillion in financial aid, failing which the firm might run out of money.

It has also saved more than VND5.3 trillion, mainly by cutting the salaries of its employees, working with banks to restructure loans and negotiating with partners to extend payment deadlines.

In reality, it has sent 14 reports to the Government asking for help and the Government, which owns over 86% of the airline, has issued preferential support packages for it. Procedures to disburse these packages are being completed, Hien added.

According to Dang Anh Tuan, head of Vietnam Airlines’ Communications and Branding Department, the air carrier opened 22 new domestic air routes after the first wave of Covid-19 was controlled. However, they were suspended due to the second Covid-19 wave and only 11 of them have been resumed.

Regarding international air routes, Vietnam Airlines still operates the most international flights among the Vietnamese air carriers but it has reached only 35%-40% of its capacity. The air carrier now maintains two air routes from Hanoi to South Korea’s Seoul and Japan’s Tokyo.

In the January-September period, Vietnam Airlines operated 46,700 flights carrying nearly 11.9 million passengers. The firm currently has more than 60 domestic air routes with an average of 300 flights a day.

As for international flights to Vietnam, regulations on quarantining passengers will be issued this week, according to delegates at a meeting of the Ministries of Foreign Affairs, Health and Transport and other relevant agencies. As soon as the competent agencies issue specific instructions, Vietnam Airlines will resume flights from other countries to Vietnam.

The Saigon Times – October 14, 2020