Domestic airlines have had to pay over VND100 billion (US$4.4 million) every day while 80-90 per cent of their fleets are grounded.

The airlines have had to pay more than VND100 billion (US$4.4 million) every day while 80-90 per cent of their fleets were grounded, according to Bui Doan Ne, vice-president of the Vietnam Aviation Business Association (VABA).

During the first half of the year, demand for air travel fell by 60-70 per cent compared to the pre-pandemic level. Since the end of May, sales have plummeted by 80-90 per cent, said the airlines.

"COVID-19 has effectively put a stop to most, if not all international routes and it may take years for the airlines to recover," Ne said.

"That's why we are asking the banking sector to provide privately-owned airlines with 0 per cent interest loans in the amount of VND4 trillion over a three-year term. In addition, the airlines ask to apply for the State's support loan package of VND25 trillion on 3-4 year terms," he said.

Short-term debts due for payment among the three largest airlines have reached a total of VND36 trillion with VNA alone accounting for VND20 trillion. VABA has asked banks for loans worth VND30 trillion, of which VND10-12 trillion allocated to VNA, VND10 trillion to Vietjet, VND5 trillion to Bamboo Airways, VND5.7 trillion to Pacific Airlines and VND1 trillion to Vietravel Airlines.

Tran Thanh Hien, VNA's head of accounting, called for a comprehensive policy to support the airlines which includes relaxed rules on collateral, reduced interest rates and payment deadline extension, among others.

"As of now, no airline is capable of surviving the pandemic without ample support from the Government, their shareholders and partners," Hien said.

A representative from Bamboo Airways asked the banks to extend their interest rate cut until the end of 2022 while allowing airlines access to new loans.

Nguyen Thanh Tung, vice director-general of Vietcombank (VCB) - one of the largest commercial banks in the country - said to date VCB has provided the airlines VND16 trillion in credit at a preferential interest rate.

"We are willing to support the airlines. However, we must ask the SBV to give us more credit room. As of now, we have reached our limits and are unable to grant large loans," said Pham Quoc Thanh, director-general of HDBank.

SBV deputy governor Dao Minh Tu said the government views the airlines as a pillar of the economy. The SBV will consider the banks' request to raise their credit limit.

Meanwhile, the SBV is to work together with the Ministry of Planning and Investment, the Ministry of Transport and the Ministry of Finance to build a support package for the airlines.

Source: VNS