Debts of three local airlines total VND36 trillion: VABA
The total short-term and due debts of Vietnam Airlines, Vietjet and Bamboo Airways have reached VND36 trillion and they are facing a shortage of cash flows, according to the Vietnam Aviation Business Association (VABA).
|Aircraft of Vietnam Airlines, Bamboo Airways and Vietjet are parked at a local airport. The total short-term and due debts of Vietnam Airlines, Vietjet and Bamboo Airways have reached VND36 trillion. - Photo: VIETNAMPLUS|
VABA has proposed some solutions to the Ministry of Planning and Investment to help the local aviation sector, which has been hit hard by the coronavirus, Nguoi Lao Dong newspaper reported.
According to the association, aviation is a driving force of the economy. Foreign experts have calculated that if the aviation sector grows 2.5%, it would contribute 1% to the country’s gross domestic product.
Before the Covid-19 pandemic broke out, the sector’s annual revenues grew 15%-20% on average. However, since early last year, the pandemic has delivered a blow to the sector.
Specifically, the revenue of Vietnamese air carriers plunged over 60% last year. Vietnam Airlines, Vietjet and Bamboo Airways have incurred combined losses of VND16 trillion.
This year, the third and fourth pandemic waves occurred during the lunar New Year and summer holidays, resulting in an unimaginable decline in revenues of local airlines. In May and June, their revenue plummeted 90% over the same period last year.
Meanwhile, air carriers have to spend more than VND100 billion per day to maintain their operations during the pandemic.
Bui Doan Ne, vice chairman and general secretary of VABA, said airlines’ financial resources had become exhausted, while accessing loans was tough and interest rates were high. The Government’s support policies have been worked out promptly but deployed slowly.
Therefore, VABA urged the Ministry of Planning and Investment to propose to the National Assembly to allow the provision of financial aid packages worth VND5-6 trillion, such as the VND4-trillion package granted to Vietnam Airlines, for other airlines.
It also proposed VND25-trillion loans for air carriers with a preferential lending rate of 4% for three to five years so they could recover and develop.
In addition, airlines should be entitled to a reduction of 50% in service fees at airports, while the corporate income tax of units and enterprises training laborers for the aviation sector should be reduced until the end of next year.
VABA stressed the need for large-scale Covid-19 vaccination and the application of Covid-19 vaccine passports. The Government should relax regulations on traveling and quarantine for fully vaccinated people and work out plans to reopen international air services at the earliest.
Vietnam Airlines is in an extremely difficult situation as it continues incurring losses. Private airlines, including Vietjet Air and Bamboo Airways, have also been affected financially.
According to the Vietnam Aviation Business Association (VABA), Vietnamese airlines have beared short-term debts and due debts up to VND36 trillion (US$1.6 billion) since the Covid-19 outbreak in the country.