Vietnam Airlines (VN, Hanoi Noi Bai International) has appealed to the government to provide VND12 trillion dong (USD519 million) in emergency liquidity while it struggles to cut costs through restructuring and payment delays, VnExpress reported. It may offer a larger stake in the company in exchange for the funds, or accept it as a loan.
The 86.19%-government-owned flag carrier is likely to post a loss of VND13 trillion (USD563 million) this year, CEO Thành Trí Dương said at a meeting with government officials on July 13, adding that revenues are expected to halve from last year's total to around VND50 trillion (USD2.2 billion).
In April, it operated an average of four domestic flights a day, while all scheduled international flights had ceased. By June, revenues from domestic flights were 84% of what they were in June 2019, but the carrier achieved only 46% of revenues in total for the month year-on-year, the chief executive said, according to the business newspaper Báo Đầu tư.
The domestic market will fully recover to pre-pandemic levels by the end of 2021, the international sector a year later, he said.
Government advisors suggested various options to rescue the airline, such as allowing the State Capital Investment Corporation national wealth fund to invest and issuing more shares to existing shareholders.
“As a shareholder, a government can lend, act as a guarantor, or issue shares to existing shareholders to keep a company from going bankrupt,” assured Nguyễn Đình Cung, a government economic advisor.
Thanh said that Vietnam Airlines had already reached out for possible funding to ANA - All Nippon Airways (NH, Tokyo Haneda), which owns a 8.6% stake in the company, but as the Japanese airline is also experiencing hardships it could not currently assist with a loan.
Vietnamese airlines carried 14.6 million passengers in the first six months of 2020, down 46% from last year, according to the country's General Statistics Office.
