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Vietnam's aviation enterprises again seek preferential loans

Local aviation enterprises have again asked for preferential loans to overcome difficulties caused by the pandemic.

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Domestic airlines have sent another written request to the Ministry of Transport seeking preferential loans to deal with difficulties due to the pandemic. — Photo courtesy of VNA

The Vietnam Aviation Business Association (VABA), sent another written request to the Ministry of Transport to propose the Government give airlines preferential loans. 

VABA Secretary General Bui Doan Ne said in the document: "Since the 4th outbreak of COVID-19, local airlines are in a dangerous situation as their revenue has decreased by 80 to 90 per cent, cash flow is seriously falling and the accumulated financial and asset resources of the firms are exhausted."

Reports from local airlines all showed that they needed help to solve difficulties in capital.

In this case, VABA asked MoT to consider, approve and make a proposal to the Government and the National Assembly and relevant ministries and branches to lend local airlines a refinancing package of VND4 trillion to VND6 trillion with no interest like the package Vietnam Airlines was given.

Specific loans will be based on the needs of each firm and according to their size, market share, contribution to the budget and ability to meet the budget.

The association proposed to lend local airlines between VND25 trillion (US$1.08 billion) and VND30 trillion in total, with preferential interest rates to help airlines with regular expenditure, procurement of supplies and equipment, implementation of programmes, maintenance, operations and development during and after the pandemic.

VABA also asked for adjustments to the environmental protection tax rate for jet fuel to a minimum level of about VND1,000 per litre from the current VND3,000.

The document also asked MoT to allow the reduction of most service fees at airports to a maximum 50 per cent from January 1, 2022 to the end of December 2022, adding that airlines should be given priority in support as the aviation industry was the driving force for the development of the country's economy.

The document said: “Despite difficulties due to the COVID-19 pandemic, aviation is a bright spot in pandemic prevention and control, making positive contributions to stimulating tourism, rescuing citizens, social security, transporting staff, doctors and medical personnel, as well as free transportation of vaccines and medical equipment.”

According to VABA's assessment, aviation has very high prospects for development after the pandemic, especially private aviation, saying: “Thailand has a population of about 75 per cent of Vietnam, but it has 15 airlines.”

Meanwhile the rate of Vietnamese people using air travel is still low, so the development of Vietnam's aviation market is still very high, said the association, adding the industry will make a large contribution and support the budget and the economy.

A representative of VABA said: "According to international experts' calculations, the aviation growth of 2.5 per cent will contribute to growth of 1 per cent of GDP. The development of aviation will help the development of other industries, connecting supply chains, commodity chains, value chains and actively contributing to the recovery and development of our country's economy after the pandemic."

The industry's annual budget contribution was increasingly important. Vietnam Airlines, Vietjet Air, Vietnam Airport Corporation, and Vietnam Air Traffic Management Corporation have contributed more than VND22 trillion in taxes and fees in 2019, as much as the contribution of the top ten cities and provinces with the largest budget contributions.

Vietjet Air's annual budget payment increased from VND4.2 trillion in 2016 to VND9 trillion in 2019. Despite heavy losses due to the pandemic last year, the private airline still paid VND2.8 trillion to the State budget.

On December 2, Deputy Minister of Transport Nguyen Ngoc Dong said while MoT was developing a plan to open international routes, the recent resurgence of the pandemic and new variants would require more consideration.

While reviewing and negotiating with other countries before any decision to ensure the safe resumption of international routes, MoT and the Civil Aviation Administration of Vietnam allowed increases to frequency on a series of important local routes from December 5, as to return to normal exploitation in 2022 on the principle of flexibility and adaptation, with appropriate routes to ensure safety and effectively control the pandemic.

Head of the communications department of Vietnam Airlines Group Dang Anh Tuan said that, the group’s members Vietnam Airlines, Pacific Airlines and VASCO urgently deployed plans to operate regular domestic passenger flights from December. Currently, the group ran about 140 flights per day on nearly 40 domestic routes, said Tuan, adding it was planning to meet the needs of passengers during the New Year and Lunar New Year in early 2022.

Vietravel Airlines, Bamboo Airways and Vietjet Air also increased domestic flights and stood ready to serve regular international routes, as soon as the Government allows them to reopen.

Source: Vietnam News

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