Solutions sought for struggling aviation sector to overcome COVID-19 impacts
Economists gathered at an online conference on August 2 to seek financial solutions for struggling Vietnamese airlines amid COVID-19 pandemic.
A Vietnam Airlines aircraft. Illustrative image (Source: VNA)
Nguyen Quoc Hung, General Secretaryr of the Vietnamese Banks Association said that before the pandemic broke out, Vietnamese airlines had recorded outstanding growth, with many private airlines emerging such as Vietjet Air and Bamboo Airways.
The consecutive outbreaks of COVID-19 from the beginning of 2020 have posed adverse impacts on the firms, he noted, pointing out the Government’s efforts to support them. However, the current fourth wave of the pandemic has worsened the situation.
So far, only Vietnam Airlines has received soft loans, while other are still struggling in accessing credit, he said, explaining that due to losses in revenue, airlines fail to meet requirements in borrowing loans from banks.
Meanwhile, Bui Doan Ne, Vice Chairman and General Secretary of the Vietnam Aviation Business Association said that the association has proposed a number of solutions to the Government, including the application of “vaccine passport,” the loosening of travel restrictions for passengers who receive full two vaccine shots.
Besides, the association has suggested that the Government ask for the National Assembly’s approval for refinancing 5-6 trillion VND to private airlines like Vietjet Air and Bamboo Airways for a duration of 12 months with two automatic extension.
The association also asked for a 70-percent reduction of the environmental protection tax for airlines to June 30, 2022, along with cuts of aviation fees in airports and corporate income taxes for aviation personnel training facilities, he added.
Can Van Luc, an economist from the Bank for Investment and Development of Vietnam (BIDV) said that it is necessary to support airlines in overcoming COVID-19 through flexible policies and measures, ensuring fairness among all firms.
Hung underlined the need for a legal corridor for the rescue of domestic airlines, for example a National Assembly resolution, and procedures for earlier support measures should be streamlined and new mechanisms created to give airlines easier access to bank loans.
According to Ne, the COVID-19 has resulted in 80-90 percent reduction in aviation sector’s revenue. Last year, the sector's passenger transport dropped by nearly 50 percent compared to 2019. In the first six months of 2021, the sector transported only 13.5 million passengers, down 14.6 percent year on year.